If the Fed is pursuing a fixed interest rate target, an increase in the money supply will berequired whenSelect one:O a. money demand increases.O b. GDP decreases.c. M2 increases relative to M1, because the transaction cost of transferring moneyfrom savings accounts to checking accounts declines.O d. money demand decreases.

"Money demand is downward sloping curve depicting a negative relationship between interest rate and…

If the Fed is pursuing a fixed interest rate target, an increase in the money supply will be required when Select one: O a. money demand increases. O b. GDP decreases. O c. M2 increases relative to M1, because the transaction cost of transferring money from savings accounts to checking accounts declines. O d. money demand decreases.

If the Fed is pursuing a fixed interest rate target, an increase in the money supply will be required when Select one: O a. money demand increases. O b. GDP decreases. O c. M2 increases relative to M1, because the transaction cost of transferring money from savings accounts to checking accounts declines. O d. money demand decreases.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Suppose that the reserve requirement is 12.5% and that commercial banks are NOT holding excess reserves. If the Federal Reserve wishes to reduce the money supply by $200 billion, it should conduct an open-market purchase of $16 billion O open-market purchase of $25 billion open-market sale of $16 billion O None of these answers is correct. O open-market sale of $25 billion
Suppose a bank has $200 million in checking account deposits with no excess reserves and the required reserve ratio 20%. If the Fed reduces the required reserve ratio 10%, and the bank keeps same reserves as before the change, it will now have excess reserves of O0 Million 10 million 20 million 30 million
Pls select the correct option and exlplain it.
Which of the following are tools the Federal Reserve uses to control the supply of mone Select one: O a. Open market operations O b. Term auction facility c. Interest of reserves d. Discount rate e. All of the above O O O
By using open market operations, the Federal Reserve O a. adjusts the supply AND demand of reserves to keep the federal funds interest rate equal to its target. O b. adjusts the supply of reserves to keep the federal funds interest rate equal to its target. Oc controls banks' demand for reserves, thereby keeping the federal funds rate equal to its target. O d. adjusts the demand of reserves to keep bank rates in line with the federal funds rate target. O e. None of these answers is correct.
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Which of the following would NOT result in a decreased money supply? Select one: O a. Decrease in the reserve ratio b. Increase in the currency ratio Decrease in the money multiplier d. Decrease in the monetary base C.
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Suppose you transfer the balance of your savings account at your credit union to your chequing account at your bank. How would this transfer of money affect M2 and M2+? Select one: M2 would increase and M2+ would fall. O b. M2 would inerease and M2+ would stay the same. Oc There would be no change in either M2 or M2+ d. Both M2 and M2+ would fall Clear my choice
23
People in the economy have 350 billion CZK on current accounts, they have 250 billion CZK on saving accounts, people hold 200 billion CZK in cash, commercial banks hold 100 billion CZK in cash and the central bank holds 50 billion CZK in cash. What is the money stock M1? O 550 billion O 700 billion O 750 billion O 600 billion