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Hi, I need help ASAP with this question. Question: The Fed has decreased the federal funds rate a nominal short-term interest rate to 0% and
Hi, I need help ASAP with this question.
Question:
The Fed has decreased the federal funds rate a nominal short-term interest rate to 0% and yet the economy is still struggling. Explain what tools it still has at its disposal to help spur the economy and how it could use them.
Hint: Tools the Fed uses to influence the Federal Funds Rate.
1. Pay interest to banks on excess reserves
2. Borrows money overnight from financial institutions
3. Lends directly through the discount window
4. Buys and sells government bonds
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