In the next month’s upcoming Monetary Policy discount rates are expected to increase by 200bps. In this case, the Money Market dealer should invest in which of the following and why? 1) Daily Product 2) 6-Months T-Bills 3) 6-Months TDR
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In the next month’s upcoming
1) Daily Product
2) 6-Months T-Bills
3) 6-Months TDR
Step by step
Solved in 2 steps
- True or False 2. The Fed uses the monetary policy tool of open market operations to affect interest rates. Type out the correct answer within 40 min with proper explanation of it. Will give you thumbs up only for the correct answer. Thank youOwing to increasing, food and transport prices, the Consumer Price Index (CPI) in South Africa accelerated from 6,5% to 7,4% in June 2022. As a result, the monetary policy committee (MPC) decided to increase the repurchase rate by 75 basis points to 5,50% per year, with effect from 22 July 2022. with the aid of a diagram, explain how the money market in South Africa will be affected by the MPC's decision to increase the interest rate. The direction of any changes should be clearly indicated by using arrows.Calculate the Required Reserves given the following information. rrr = .11 Total Deposits: $7200 Total Reserves: $3500 Instructions: Whole numbers only. No margin for error
- Identify which one is M1, M2 or both i)1000Taka Eid gift from relatives, ii) employer pays salary to employee in their bank account iii) a 10 year fixed deposit iv) traveler’s check iv) MMMF.EconomySustaining members of public radio stations, such as WRKF in Baton Rouge and WWNO in New Orleans, make fixed monthly monetary donations to support the programming on those stations. These charitable donations are an example of which of the following functions of money? Select one: A. Unit of account. B. Standard of value. C. Medium of exchange. D. Means of unilateral payment. E. Standard of deferred payment.
- 7(M/P)d = 1,000 − 100r,M = 1000P = 2.a) Graph the supply and demand for real money balances.b) What is the equilibrium interest rate?c) Assume that the price level is fixed. What happens to the equilibrium interest rate if the supply ofmoney is raised from 1,000 to 1,200?d) If the Central Bank wishes to raise the interest rate to 7 percent, what money supply should it set?The deposit with post office is $23,000 and the value of M3 is $40,000 Calculate the value of M4
- You are the bank's liquidity manager. If the liquidation cost of highly non-liquid assets decreases, the risk of illiquidity [A] and the cost of illiquidity [B]. Therefore, it you can [C] the ESF buffer. As a result, your bank will provide [D] liquidity transformation for society. C and D are increase, the same decrease, the same increase, less decrease, more9. How would you incorporate security considerations/costs into the transactions demand model? What would this imply for the demand for currency in a relatively insecure urban environment (a) compared with a relatively safe one, (b) when owner-identified smart cards become available? Do these factors affect the demand for demand deposits? How would the proportion of currency to demand deposits be affected in these cases? 10. Can the transactions demand model be used to explain why financial innovations in recent decades have reduced the transactions demand for M1? 11. Are transactions demand models useless, as Sprenkle (1969) argued? If they are, how would you explain the demand for M1 or just for demand deposits in the economy?BOC is Bank of Canada a.) Decrease, not change, increase B.) Decrease, no change, increase C.) Decrease, no change, increase D.) sterilized, unsterilized E.) sterilized, unsterilized F.) buying, selling, dumping, sterilizing G.) Increase decrease no change unsterilized