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  5. Exploring The Ample Reserve Framework In Monetary Policy
Exploring the Ample Reserve Framework in Monetary Policy

Exploring the Ample Reserve Framework in Monetary Policy

Assessment

Interactive Video

•

Social Studies

•

6th - 10th Grade

•

Practice Problem

•

Easy

Created by

Aiden Montgomery

Used 1+ times

FREE Resource

The video explains the Federal Reserve's shift in monetary policy framework from a limited to an ample reserve system post-2008. It details how reserves function as assets for commercial banks and liabilities for the Fed. The video discusses the impact of this shift on the federal funds rate and the transition from open market operations to administered interest rates as the primary policy tool. The Fed's current approach to managing interest rates through administered rates like the interest on reserve balances and the overnight reverse repurchase agreement is also covered.

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10 questions

Show all answers

1.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What are reserve balances considered for commercial banks?

Fixed deposits

Assets

Non-performing assets

Liabilities

2.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What significant policy shift did the Fed make in 2008?

Eliminated the federal funds rate

Shifted from a limited Reserve policy to an ample Reserve policy

Introduced cryptocurrency regulations

Transitioned to a gold standard

3.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

By how much did reserve balances increase from 2008 to 2014?

Over 300x

Over 200x

Over 100x

Over 50x

4.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What was the Fed's primary monetary policy tool before 2008?

Quantitative easing

Interest on reserve balances

Open market operations

Discount rate adjustments

5.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What happened to the federal funds rate as a result of the policy shift?

It was eliminated

It became the only rate banks cared about

Its determination method changed

It remained unchanged

6.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Why did open market operations become less effective after 2008?

Because of the shift to a gold standard

Due to the ample supply of reserves

Due to the introduction of cryptocurrency

Because of international regulations

7.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is now considered the Fed's number one policy tool?

Federal funds rate

Open market operations

Interest on reserve balances

Discount rate

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