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This looks like a homework question. You should let us know what you think the answer is and why, before we can help you out. With that said, here's a hint: consider the role that inflation expectations play on the economy's response to the fed's rate decisions.


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Amongst the functions of Central Banks are that they are the lender of last resort and they control money supply in a country. Control of money supply does not always mean printing of bank notes. They may mop up excess funds from the economy or inject cash into the economy using various mechanisms that will involve commercial banks, for example, use of Repos ...


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