A BORROWED RESERVES TARGET IS (A) PROCYCLICAL BECAUSE INCREASES I...

103) - TEST BANK CHAPTER 18 CONDUCT OF MONETARY POLICY GOALS AND TARGETS TÀI CHÍNH TIỀN TỆ
TEST BANK CHAPTER 18 CONDUCT OF MONETARY POLICY GOALS AND TARGETS TÀI CHÍNH TIỀN TỆ
103) A borrowed reserves target is (a) procyclical because increases in income increase interest rates and discount loans, causing the Fed to increase the monetary base. (b) countercyclical because increases in income increase interest rates and discount loans, causing the Fed to increase the monetary base. (c) procyclical because increases in income reduce interest rates and discount loans, causing the Fed to reduce the monetary base. (d) countercyclical because increases ion income reduce interest rates and discount loans, causing the fed to reduce the monetary base. (e) neutral because economic activity has no effect on incentives to borrow from the Fed. Answer: A Question Status: New