What is 'Dovish' monetary policy?
Understand the Problem
The question is asking for a definition or explanation of 'Dovish' monetary policy, specifically relating to various options that could describe it. The task is to understand monetary policy aspects tied to it and provide a researched answer.
Answer
FED operations to increase inter-bank liquidity to drive down interest rates.
The correct option is 'FED operations to increase inter-bank liquidity to drive down interest rates.'
Answer for screen readers
The correct option is 'FED operations to increase inter-bank liquidity to drive down interest rates.'
More Information
Dovish policies prioritize stimulating economic growth and reducing unemployment, often through lowering interest rates.
Tips
A common mistake is confusing dovish policy with simply printing more money. Focus on policy objectives like lowering unemployment.
Sources
- Hawkish vs. Dovish Monetary and Fiscal Policy | Britannica Money - britannica.com
- What Does Dovish Mean? | Financial Glossary - Equals Money - equalsmoney.com
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