Finance Questions 11

  • 9 What factors make the Fed independent from politics? Why is there so much political pressure on the Fed, despite its independence?
  • 10 How does the Fed work to protect itself from political pressure?
  • 2 Explain how the Fed can increase the money supply by engaging in open-market operations. What role do banks play in this process?
  • 5 What are the Fed’s four tools for affecting the money supply? Which tool is used most commonly?
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