15. Please answer each of the following questions, relating to the Fed's tools of monetary control: (a) When the Federal Reserve conducts an open market operation in which it sells US government bonds, does it increase or decrease the money supply? (b) When the Federal Reserve increases reserve requirements, does it increase or de- crease the money supply? (c) When the Federal Reserve decreases the discount rate, does it increase or decrease

15. Please answer each of the following questions, relating to the Fed's tools of monetary control: (a) When the Federal Reserve conducts an open market operation in which it sells US government bonds, does it increase or decrease the money supply? (b) When the Federal Reserve increases reserve requirements, does it increase or de- crease the money supply? (c) When the Federal Reserve decreases the discount rate, does it increase or decrease

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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15. Which of the following macropolicy rules has been long championed by monetarists? * the steady expansion of the money supply at an annual rate that approximates the long-run growth of the economy, irrespective of the current state of economy the use of expansionary monetary and fiscal policy if unemployment is falling and restrictive monetary and fiscal policy if unemployment is rising the use of expansionary monetary policy if prices are rising and restrictive monetary policy if prices are falling the use of expansionary monetary policy if prices are falling and restrictive monetary policy if prices are rising TOSHIBA
(ii O Calendar Assessments Guides Registration Student Forms History Ext. Asmt. Student Files Contact Us Question 13 A local restaurant offers an "all you can eat (ayce)" brunch for $15. Jose eats three servings but leaves half of his fourth helping uneaten. Why OA. His marginal value of an additional bite has fallen to zero OB. The total value he has placed on brunch is $15. OC. His marginal value of additional food has fallen below $5 ($15 divided by 3). O D. His marginal value of brunch has fallen below $15. < Previous C
6. An economy is facing a recessionary gap and the Federal Reserve decides to engage in expansionary monetary policy. What are the three tools that the Federal Reserve can use to get the money supply to grow and what direction should each take?
2. Outline the three monetary policy instruments the fed can implement if its objective is to cool off an economy suffering from high inflation.
1. Which do you think would be more harmful to the economy—an inflation rate that averages 5 percent a year that has a high standard deviation or an inflation rate of 7 percent that has a standard deviation close to zero? 2. Suppose a major bank needs to borrow $20 billion overnight that it cannot obtain from private creditors. The Fed is willing to make a discount loan of $20 billion provided that it will not alter the aggregate supply of reserves to the banking system. How can it do so?
What are the three instruments of monetary control? Explain. Why does the Federal Reserve prefer to use open market operations? Explain. How can the Federal Reserve use its open market operations to expand or contract the nation’s money and credit supply? Explain in some detail. Describe the workings of the Federal Open market Committee which controls monetary policy. Give a detailed account of how monetary policy works to change interest rates, aggregate demand, and the macroeconomy.
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I only need Help with part (B)
Multiple choices 1. Banks face liquidity risk because A) they can have difficulty meeting their depositor's demands to withdraw money. B) they are unable to borrow from the Federal Reserve. C) households and businesses may seek to borrow a large amount of funds in a short period of time. D) governments tend to run high budget deficits. 2. The original intention of the Fed's role as lender of last resort was to make loans to banks that were A) not illiquid nor insolvent. B) illiquid, but not insolvent. C) insolvent, but not illiquid. D) both illiquid and insolvent. 3. Why might a nation seek to maintain a pegged exchange rate? A) It makes business planning easier for firms involved in the global economy. B) It removes the need to intervene in the foreign exchange market. C) It ensures that the exchange rate will remain at its equilibrium. D) It makes their currency more attractive on the foreign exchange market. 4. Suppose a country pegs its currency. If investors start to believe the…
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