Question
1. Why do you think reserve requirements and discount rates are being phased out as policy tools by many central banks around the world? Are
1. Why do you think reserve requirements and discount rates are being phased out as policy tools by many central banks around the world? Are reserve requirements and the discount rate a general credit control or a selective credit control? Why?
2.. Why are open market operations increasingly the most popular and frequently used monetary policy tool? What are the principal effects of open market operations on the financial system?
3. What is moral suasion? Do you believe this tool can be effective?
4. What are the principal economic goals of the Federal Reserve System? How could the Fed cause changes in the rate of inflation? In unemployment and economic growth? In the nation's balance-of-payments position?
5. How numerous are bank failures and what seem to be their most important causes?
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