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(a) What is the federal funds rate?

(b) What is the federal funds target rate?

(c) What is federal funds effective rate?

(d) Provide a brief explanation of Taylor Rule.

(e) The FOMC uses the open market operation to ensure that the effective federal funds rate fluctuates closely around the target. What is the current level of the effective federal funds rate?

(f) The FOMC usually decides on whether or not to change the target federal funds rate during the pre-scheduled FOMC meetings. What is your opinion on whether or not the FOMC should raise the target federal funds rate at the coming January meeting and why?  

Financial Management, Finance

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