QUESTION 21 If there is a recession in the economy then Fed may act by O a. buying bonds. This buying would increase the money supply. b. buying bonds. This buying would reduce the money supply. C. selling bonds. This selling would increase the money supply. d. selling bonds. This selling would reduce the money supply.

QUESTION 21 If there is a recession in the economy then Fed may act by O a. buying bonds. This buying would increase the money supply. b. buying bonds. This buying would reduce the money supply. C. selling bonds. This selling would increase the money supply. d. selling bonds. This selling would reduce the money supply.

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. When the Fed decreases the discount rate, banks will a. borrow more from the Fed and lend more to the public. The money supply increases. b. borrow more from the Fed and lend less to the public. The money supply decreases. c. borrow less from the Fed and lend more to the public. The money supply Increases. d. borrow less from the Fed and lend less to the public. The money supply decreases.
3 In Friedman's theory, money demand is a function of a. average past income, current inflation, return on bonds, return on equities b. permanent income, expected inflation, return on money, return on bonds, return on equities c. return on bonds, return on inflation, return on equities, return on stock d. current income, expected inflation, return on money, return on bonds, return on equities
Compared to money, bonds are Select one: a. less liquid and riskier. b. less liquid and less risky. c. more liquid and less risky. d. less liquid and of equal risk. e. more liquid and riskier.
Urgent
I only need Help with part (B)
1.) The government increases the supply of money by 50%. The quantity equation of money tells us to expect that, in the long run, A.) real GDP will increase 50%. B.) velocity will increase 50%. C.) the price level will increase 50%. D.) the price level will decrease 50%.
3. When the Fed buys bonds (or bond options) on a large scale from private banks, ceteris paribus, a. it tends to cause deflation. b. the money supply tends to decrease. c. the money supply tends not to change. d. aggregate demand tends to shift left. e. the money supply tends to increase.
To fight recession, the Fed will: (Select all that apply) A. Buy securities on the open market. B. Raise the discount rate and federal funds rate. C. Lower discount rate and federal funds rate. D. Lower reserve requirements
Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
Explanation it correctly Q)28. According to the Keynesian model of the money market, the money supply. a. It depends on the interest rate. b. is determined by the central bank. c. varies with price levels. d. varies with income
The bond market is depicted in the graph to the right. a. The bond demand curve is downward sloping because A. lower bond prices translate into higher interest rates and returns. B. as the interest rate decreases people are willing to buy more bonds. C. the government sells more bonds at lower interest rates. D. the Fed's decision to buy or sell bonds is independent of the interest rate. b. Suppose the Fed decides to buy bonds. 1.) Using the line drawing tool, depict changes in the bond market. Properly label your line. 2.) Using the point drawing tool, label the new equilibrium point 'E₁'. Carefully follow the instructions above, and only draw the required objects. Price of Bonds 1000- 900- 800- 700- 600- 500- 400- 300- 200- 100- 0- 0 T 5 10 So Eo 15 20 25 30 35 Quantity of Bonds D 40 45 7 50 Q