Explain how each of the following tools allows the Fed to fine-tune its control of bank reserves:

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Explain how each of the following tools allows the Fed to fine-tune its control of bank reserves:
a. The ability to pay interest on reserves
b. The Term Deposit Facility (TDF)

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Macroeconomics

ISBN: 9780132109994

1st Edition

Authors: Glenn Hubbard, Anthony Patrick O'Brien, Matthew P Rafferty

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Question Posted: Feb 04, 2016 06:51 AM

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Explain how each of the following tools allows the Fed to fine-tune its control of bank reserves:

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a Since the Fed pays interest on bank reserves banks have an extra incentive ...View the full answer

Macroeconomics

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