If the money multiplier decreased from 20 to 4, then O the Fed increased the reserve ratio from 5 percent to 8 percent. the Fed increased the fed funds rate from 5 percent to 8 percent. the Fed increased the reserve ratio from 5 percent to 25 percent. the Fed decreased the fed funds rate from 8 percent to 5 percent. Question 30 (1 point) Listen The FOMC is able to increase the money supply when it buys US government securities. The increase will be larger, the larger is the reserve rat buys US government securities. The increase will be larger, the smaller is the reserve ra sells US government securities. The increase will be larger, the smaller is the reserve rat sells US government securities. The increase will be larger, the larger is the reserve ratic

If the money multiplier decreased from 20 to 4, then O the Fed increased the reserve ratio from 5 percent to 8 percent. the Fed increased the fed funds rate from 5 percent to 8 percent. the Fed increased the reserve ratio from 5 percent to 25 percent. the Fed decreased the fed funds rate from 8 percent to 5 percent. Question 30 (1 point) Listen The FOMC is able to increase the money supply when it buys US government securities. The increase will be larger, the larger is the reserve rat buys US government securities. The increase will be larger, the smaller is the reserve ra sells US government securities. The increase will be larger, the smaller is the reserve rat sells US government securities. The increase will be larger, the larger is the reserve ratic

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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2. Problems and Applications Q2 If the Fed wants to increase the money supply, it can If the Fed wants to decrease the money supply, it can If the Fed wants to increase the money supply, it can bonds in open-market operations. the reserve requirement. the interest rate it pays on reserves. When the FOMC decreases its target for the federal funds rate, the money supply will If people decide to hold less currency after a rash of pickpocketing, the money supply
Table 10-2 Last Bank of Cedar Bend Assets: Reserves Loans Liabilities: $25 000 Deposits $180 000 S155 000 efer to the Table 10-2. If the reserve requirement is 10 percent and then someone deposits $50 000 into the bank, what is the bank's reserve osition? alect one: cross a. It will have $52 000 in excess reserves. cros b. It will need to raise reserves by $5000. cros c. It will have $57 000 in excess reserves. d. It will have excess reserves of $2000.
1. If excess reserves are zero and the BSP increases the required reserve ratio from 5 percent to 10 percent, then the money multiplier (increases, decreases) from _ to and money supply (increases, decreases) the required reserve ratio is 8 percent, commercial banks do not hold excess 2. If reserves, and people do not hold currency, then when the Central Bank purchases $20 million of government bonds, bank reserves of commercial banks (increase, and the decrease by money supply eventually (increases, by L. 3. If the reserve ratio is 15 percent, and comme;c:al banks do not hold excess reserves, an, people hold only demand deposits and ro, currency, then when the Central Bank sells $65 million worth of bonds to the public, commercial bank reserves (increase, and the money decreases) decrease) by supply eventually (increases, decreases) 4. A decrease in the discount rate will (increase, decrease) commercial bank borrowings from the central bank, (increase, decrease) commercial bank…
1. If the demand for money curve shifts from Md1 to Md0 the equilibrium interest rate will.. Increase from 5% to 10% Decrease from 7% to 5% Increase from 5% to 7% Remain at 7% 2. If the demand for money curve shifts from Md1 to Md0 and the interest rate remains at 5% there will be An equilibrium in the money market An excess demand for money An equilibrium in the bond market An excess supply of money
The graph shows the demand curve for reserves in the market for bank reserves. 8.00- Federal funds rate (percent per year) The federal funds target rate is 4 percent. Draw the supply of reserves curve determined by the Fed to achieve the federal funds target rate. Label it. 7.00- Draw a point at the equilibrium in the market for bank reserves. 6.00- 5.00- 4.00- 3.00- 2.00- 0 25 50 75 RD 100 Reserves on deposit at the Fed (billions of dollars) >>> Draw only the objects specified in the question. ☑
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QUESTION 12 The dollar depreciates by 20 percent against the Euro. Powell should O Increase the monetary base by 20 percent Reduce the monetary base by 18 percent Reduce the moriey 22 percent. Do nothing Not enough information to answer this question QUESTION 13 Banks become more optimistic due to an improvement in the economy. The money multiplier increases by 10 percent. Powell should O Increase the monetary base by 20 percent O Reduce the monetary base by 8 percent O Reduce the money 22 percent O Do nothing O None ofthe above QUESTION 14 President Biden increases the government deficit to 10 percent of GDP. Powell should O Increase the money supply by 10 percent O. Reduce the money supply by 10 percent O Reduce the money supply by 12 percent O Do nothing O We do not have enough information to answer.
6. Banks hold some deposits on reserve at the Fed because a. These deposits meet the reserve requirements of the Fed. b.The Fed requires every bank to hold at least $100 million on deposit at all times. c.These are membership dues for being a member bank. d. The Fed will insure those deposits, but will not insure regular bank deposits.