Question: Why is paying interest on reserves an important tool for the Federal Reserve in managing crises? Compare the methods of controlling the money supplyopen market

  1. Why is paying interest on reserves an important tool for the Federal Reserve in managing crises?
  2. Compare the methods of controlling the money supplyopen market operations, loans to financial institutions, and changes in reserve requirementson the basis of the following criteria: flexibility, reversibility, effectiveness, and speed of implementation.
  3. What procedures can the Fed use to control the federal funds rate?
  4. What methods have inflation-targeting central banks used to increase communication with the public and to increase the transparency of monetary policymaking?

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