prepare a two page (double-spaced) essay and answer the following questions:
- Which of the monetary tools available to the Federal Reserve is most often used? Why?
- Describe how expansionary activities conducted by the Federal Reserve impact credit availability, the money supply, interest rates, and security prices.
- Suppose the Federal Reserve purchases $10 billion worth of foreign currency in exchange for deposit accounts at the Federal Reserve. Show the changes that result from this transaction on the Fedâ€™s balance sheet.
Cite references to material that you use in preparing the essay.