Interest rates can be measured more accurately andquickly than reserve aggregates; hence an interest rateis preferred to the reserve aggregates as a policy instrument.” Do you agree or disagree? Explain your answer

Q: What is the difference between the price of oil in the market for oil and the price of reserves in…

A: The price of oil in the market for oil refers to the current market price at which oil is bought and…

Q: Who benefits when the Bank of Canada lowers interest rates? Who benefits when interest rates rise?…

A: Firms ( who are borrowing ) and consumers benefit when the Bank of Canada lowers interest rates.…

Q: An increase in the interest rate will cause an increase in the demand for money. True False

A: Demand for money depicts when people demand more money to fulfil their needs and wants. It depends…

Q: Discuss the measures of the monetary aggregates that is composed of the most liquid asset

A: The monetary aggregates refer to monetary measures. Typically, the monetary measures are divided…

Q: If the reserve ratio is 30% calculate the value of the multiplier

A: Meaning of Money Multiplier: As from the word, the money multiplier refers to the situation under…

Q: We saw that former Federal Reserve Chairman Ben Bernanke argued that w interest rates in the United…

A: The Federal Reserve supervises financial system risks and involves at home and abroad to help make…

Q: If the Federal reserve decides to reduce the money supply through open market operations, then the…

A: If the Federal reserve decides to reduce the money supply through open market operations, it will do…

Q: Practice Use a money demand and supply diagram to show and explain what will happen to interest rate…

A: The money demand curve shows the inverse relationship between the interest rate and the quantity of…

Q: What would happen to the federal funds rate if there was an increase in the amount of checkable…

A: The federal funds rate is the interest rate at which commercial banks and depository institutions…

Q: What is money? Explain the definition in terms of the functions of money?

A: Money is anything that is generally accepted by the people in the economy and used for the purchase…

Q: Calculate the value of multiplier

A: Formula for calculation of multiplier is Multiplier = 1/LRR, where LRR is Legal Reserve Ratio