FIN 3005 FIN3005 Week 2 Individual Work 2 (Everest University)

FIN3005 Week 2 Individual Work 2 (Everest University)

Questions and Applications

1. The Fed. Briefly describe the origin of the Federal Reserve System. Describe the functions of the Fed district banks.

2. FOMC. What are the main goals of the Federal Open Market Committee (FOMC)? How does it attempt to achieve these goals?

3. Open Market Operations. Explain how the Fed increases the money supply through open market operations.  

6. Reserve Requirements. How is money supply growth affected by an increase in the reserve requirement ratio?  

7. Control of Money Supply. Describe the characteristics that a measure of money should have if it is to be manipulated by the Fed.

9. Open Market Operations. Explain how the Fed can use open market operations to reduce the money supply.

11. Discount Window Lending during Credit Crisis. Explain how and why the Fed extended its discount window lending to nonbank financial institutions during the credit crisis.

13. Bailouts by the Fed. Do you think that the Fed should have bailed out large financial institutions during the credit crisis?

18. Fed Facility Programs during the Credit Crisis. Explain how the Fed’s facility programs improved liquidity in some debt markets.