Explain how does reserve ratio set by the federal reserve

Reference no: EM1335077

Why might the Fed want to decrease the money supply?

1) What is meant by fiscal policy?
2) How does crowding out occur?
3) What is aggregate demand?
4) What is an automatic stabilizer? Name one.
5) Name three functions of money.
6) How does the reserve ratio set by the Federal Reserve affect the ability of banks to make loans?
7) Name the tools of the federal Reserve Bank. Which is most important?
8) How does the real interest rate differ form the nominal interest rate?
Questions Schiller Text - 10th Edition the economy today isbn 0072979119

Chapter 13
Ques 5. Does the fact that your bank keeps only a fraction of your account balance in reserve make you uncomfortable? Why don't people rush to the bank and retrieve their money? What would happen if they did?

Chapter 14
Ques 5. Why might the Fed want to decrease the money supply?

Chapter 15
Ques 2. Why do high interest rates so adversely affect the demand for housing and yet have so little influence on the demand for pizza?

Reference no: EM1335077

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