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Money, credit, the Federal Reserve

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1. The Federal Reserve policy makers use several different tools to influence the money supply and interest rates. Identify and briefly describe these tools. Include in your answer the difference between expansionary and contractionary monetary policies.

2. The link below takes you to a site that shows you various Treasure security rates from short to long-term. This is called the term structure of interest rates and when graphed it is called a yield curve. What is the relationship between short and long-term interest rates as the time to maturity of the debt increases?

http://www.treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yield

http://www.ustreas.gov/offices/domestic-finance/debt-management/interest-rate/yield.sht ml

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Solution Summary

Money, credit, the Federal Reserve, interest, and other topics are explored. References are also provided to justify the assertions.

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Monetary Policy: money, credit, the Federal Reserve, interest
1. The Federal Reserve policy makers use several different tools to influence the money supply and interest rates. Identify and briefly describe these tools. Include in your answer the difference between expansionary and contractionary monetary policies.

MONETARY POLICY means, the regulation of the money supply and interest rates by a central bank, in order to control inflation and stabilize currency. Monetary policy is the way the government can affect the economy. Measures employed by government to influence economic activity, specifically by manipulating the money supply and interest rates.
www.investorwords.com/3097/monetary_policy.html
Tools of monetary policy
Monetary policy is a policy regulated by country's central bank. There are three tools of monetary ...

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