Increase the federal funds rate to new prescribed target

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Reference no: EM131188077

With a graph and a brief explanation, explain how the Federal Reserve can increase the Federal Funds rate to a new prescribed target. In your explanation, include the Federal Reserve's underlying policy tool, how the Fed needs to use it for this task, and a balance sheet for the Fed that shows one of these moves (you can assume the Fed does it with a bank directly). Show how the monetary base changes (if at all) as a result. Name another variable, along with its specific change, which would change the monetary base in the same way.

Reference no: EM131188077

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