0
What tools are often used by the Federal Reserve to stimulate borrowing and spending?
Wiki User
∙ 9y ago
Some of the tools used by the Federal Reserve to stimulate borrowing and spending include changing of bank rates and altering the interest rates on treasury bills. Treasury bills with high interest rates encourage people to save.
Wiki User
∙ 9y ago
Wiki User
∙ 14y agoDecrease the discount rates to banks
Add your answer:
Earn +20 pts
A tool often used by the Federal Reserve to stimulate borrowing and spending is to?
decrease the discount rate to banks-decrease the discount rate to banks.(:
Who has the authority to lower or raise interest rates to discourage or encourage the borrowing and spending money?
Federal Reserve
Who has the authority to lower or raise interest rates to discourage or encourage the borrowing and spending of money?
Federal Reserve
What can the federal government do to try to bring the economy out of recession?
the federal reserve would try to lower nominal interest rate (monetary policy), not part of govt. The federal govt. would stimulate spending, either by lowering taxes or pumping money into the economy and spending more.
When was the Federal Reserve given the authorization for setting margin rates for the purpose of borrowing to buy securities?
In the year 1934 the Securities Act gave the Federal Reserve gave authorization for setting margin. A margin is borrowing and buying securities.
The interest rate charged to banks borrowing from the Federal Reserve is known as the?
Repo rate
How does the federal reserve reducing the interest rate affect the bond market?
The cost of borrowing money.^%
The federal reserve can change the interest rate to help the economy. What is the interest rate?
the cost of borrowing money
The Federal Reserve can change the interest rate to help the economy What is the interest rate?
the cost of borrowing money
How do changes in monetary policy affect your family's spending and business spending in the economy?
[If the Federal Reserve is selling bonds, banks will have lower reserves due to decreased deposits. With the decreased reserves, they will have to decrease the number and size of loans. The decrease in loans and the resulting higher interest rates discourage business (and consumer) borrowing and spending. The decreased spending in the economy should result in decreased business production and employment.]
How does the federal reserve influence local economics?
The Federal Reserve impacts local economics by impacting local loan rates. The overall movement of rates increases or decreases disposable income and the resultant spending.
How is the Federal Reserve relatively free from government intervention?
The Federal Reserve has its own committee who oversees the actions of its members. There are twelve banks across the country implemented by the Federal Government to watch over spending and study current financial patterns.
