Reading Guide: Section 6 Module 31
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1. How does the Federal Reserve achieve its target federal funds rate? *
1 point
2. Does graph a or b show the Federal Reserve selling bonds? *
1 point
3. Why would the target fed funds rate and the effective fed funds rate ever differ? *
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4. What is the goal of expansionary monetary policy? *
1 point
5. Check all the markets that are impacted from changes in the money supply. *
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6. Explain how the Taylor rule would help bring the Fed Funds Rate, inflation rate and the output gap together. *
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7. Would the Taylor rule be better than the FOMC (Federal Open Market Committee) deciding the Fed Funds Rate? Explain. *
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8. What is the difference between inflation targeting and the Taylor rule? *
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9. Critics of inflation targeting argue that... *
1 point
10. What do the red lines represent in the story above? *
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11. Why would the Fed want to put us into a recession?!?!?!? That's just mean. *
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12. Questions for class?
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