The part of the Federal Reserve that determines and implements the nation's monetary policy and controls supply to promote stable prices and economic growth is the O Federal Open Market Committee. O president of the Board of Governors. O12 Federal Reserve District Banks. O Board of Governors.
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- Table 29-6. Reserves Loans O $106,000 O $60,000 O $72,000 Assets O $50,200 Bank of Springfield $19,200 228,000 Refer to Table 29-6. Assume the Fed's reserve requirement is 6 percent and that the Bank of Springfield makes new loans so as to make its new reserve ratio 6 percent. From then on, no bank holds any excess reserves. Assume also that people hold only deposits and no currency. Then by what amount does the economy's money supply increase? Deposits Liabilities $240,000If a bank uses $100 of excess reserves to make a new loan when the reserve ratio is 25 percent, what happens to the money supply in the very short term? O a. It decreases by $100. O b. It increases by $25. O C. It decreases by $25. O d. It increases by $100. Show Transcribed Text Suppose a bank has $200,000 in deposits and $150,000 in loans. What is its reserve ratio? O a. 1 percent O b. 5 percent O C. 10 percent O d. 25 percent Show Transcribed Text Which list ranks the Bank of Canada's monetary policy tools from most to least frequently used? O a. bank rate changes; open-market transactions; reserve requirement changes O b. bank rate changes; reserve requirement changes; open-market transactions O c. open-market transactions; bank rate changes; reserve requirement changes O d. open-market transactions; reserve requirement changes; bank rate changesHow do banks create new deposits by making loans, and what factors limit the amount of deposits and loans they can create? When a bank makes a loan, The amount of loans and new deposits that a bank can create is limited by OA it creates a new deposit for the person who receives the loan; the banks' excess reserves, the desired reserve ratio, and the currency drain ratio O B. the Fed prints more dollar bills; the speed at which the Fed can increase the quantity of bills in circulation and the desired reserve ratio O C. the Fed creates a new deposit for the bank; the bank's total assets and total liabilities O D. the Fed creates a new deposit for the bank; the amount of excess reserves and the desired reserve ratio O E. it creates a new deposit for the person who receives the loan; the banks total assets and total liabilities
- 5. The Federal Reserve's organization While all members of the Federal Reserve Board of Governors vote at Federal Open Market Committee (FOMC) meetings, only v of the regional bank presidents are members of the FOMC. Which of the following is a responsibility of the Federal Open Market Committee (FOMC)? O Buying and selling stocks O Making decisions regarding monetary policy Issuing mortgages to homeowners The Federal Reserve's primary tool for changing the money supply is open market operations ▼ In order to decrease the number of dollars in the U.S. economy (the money supply), the Federal Reserve will sell government bonds.If the Bank of Canada enters the open market and sells $1000 of government securities, what will be the eventual change in the money supply given a 10 percent target reserve ratio in the commercial banking system and a 10 percent cash drain? O a. Increase of $10000. O b. Decrease of $5000. O c. Decrease of $1000. O d. Increase of $5000. O e. Decrease of $10000.Table 14 shows the balance sheet of the Tenth National Bank Assets Liabilities Reserves $517 Deposits $4,136 Loans $3,619 Total: $4,136 Total: $4,136 Refer to Table 14. Assume that this bank lends out its entire excess reserves. If Jerry deposits $426 of cash in a checking account in the Tenth National Bank, what's the maximum change in the money supply in the economy? O $2,982 G O $3,408 O $3,696 O $4,200 O $4,136
- Which set of actions could the central bank use to increase the money supply? Select one: O a. an open market purchase and a tax cut O b. a discount rate cut and an open market sale O c.a reduction in the required reserve ratio and an open market purchase O d. a reduction in the required reserve ratio and an open market saleThe persons who are laid off when a supermarket closes because the manager did not run the business efficiently are considered to be Select one: O a. frictionally unemployed. b. seasonally unemployed. structurally unemployed. O C. d. cyclically unemployed. marginally unemployed.Which entity acts to protect depositors from a bank run by insuring all deposits up to $250,000? O A. the Federal Reserve B. the Department of Justice O C. the FDIC D. the Office of Management and Budget Reset Selection
- 1. Legal reserve of a commercial bank A consists of cash in vault and deposits in the central bank. A question requiring a 'True/False' answer.(Required) O True O False 2.Required reserve can be used to make loans, purchase securities. A question requiring a 'True/False' answer.(Required) O True O False 3. An individual bank can create a multiple amount of deposit money from any given injection of reserves by using its excess reserve to make loans. A question requiring a 'True/False' answer.(Required) O True O False 4.If the Fed set the required reserve requirement ratio to be 0.02, bank A wishes to maintain 0.03 dollar in excess reserve for every 1 dollars in transaction deposit. What is the deposit multiplier? | (Required) If bank A found themselves with 10 in excess reserve, what is the maximum amount of new deposits (loan) created by the banking system? (Required)The creation of an asset bubble is a concern when the Federal Reserve: Select one: O a. grows the supply of money too slow O b. keeps interest rates artificially low for too long O c. raises interest rates too high O d. increases regulation that reduces bank lendingUse Table 1 to answer questions 1 and 2. Assume that the Federal Reserve prints $149.00 in currency and uses the $149.00 in currency to buy Treasury securities from the government. The government spends the $149.00, somebody earns it and they deposit into Bank A. The required reserve ratio is 7.00%. Bank A B- C D E O $9.02 Total What are the Reserves in Bank E? O$8.39 O $7.80 Table 1 O$9.50 Deposits Loans Reserves