c) The figure below shows the federal funds rate (interbank rate in the US) and the...

 

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c) The figure below shows the federal funds rate (interbank rate in the US) and the interest on reserves from 2014-2018. How does this figure show the usefulness of interest on excess reserves as a monetary policy tool vis--vis open market operations? (3 marks) FRED 20 1.4 Percent 14 14 1.2 1.0 02 06 DA 0.2 B0 00 -berest Rate -Effective Federal Fundat 2014-01 Sedan 1.5 2014-07 2015-01 2016-01 Source Board of Govenon of the Feder Sym (15) 2016-07 2017-01 2017-07 2018-01 2010-07 KU c) The figure below shows the federal funds rate (interbank rate in the US) and the interest on reserves from 2014-2018. How does this figure show the usefulness of interest on excess reserves as a monetary policy tool vis--vis open market operations? (3 marks) FRED 20 1.4 Percent 14 14 1.2 1.0 02 06 DA 0.2 B0 00 -berest Rate -Effective Federal Fundat 2014-01 Sedan 1.5 2014-07 2015-01 2016-01 Source Board of Govenon of the Feder Sym (15) 2016-07 2017-01 2017-07 2018-01 2010-07 KU