Homework Answers
The asset of the Fed is anything that the fed pays money, normally the purchase of the government securities and the loans to the commercial banks are traditional assets of the Fed. So when the Fed sells the government securities to a bank, actually there is a decline in the assets of the Fed. Here the amount of the government securities that is held the Fed will decrease.
Ans: D). The amount of the Fed's government securities decrease.
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When the Fed sells government securities to a bank, how are the Fed's assets affected? OA....
1.The Fed purchases $100,000 of U.S. government securities from One Bank. Assuming the desired reserve ratio...
1.The Fed purchases $100,000 of U.S. government securities from One Bank. Assuming the desired reserve ratio is 10 percent, banks loan all excess reserves, and the currency drain is 20 percent, how much does the quantity of money increase? A. $1,000,000 B. $10,000,000 C. $1,100,000 D. $900,000 E. $100,000 2.A bank maximizes its stockholders' wealth by ______. A. colluding with other banks to keep interest rates high colluding with other banks to keep interest rates high B. lending for long...
When the Bank of Canada wants to expand the money supply, it_ government securities, which the...
When the Bank of Canada wants to expand the money supply, it_ government securities, which the reserves of commercial banks. O A. sells, has no effect on O B. sells, increases O C. purchases, decreases OD. purchases, increases O E. sells, decreases
If the Fed sells $15 million worth of government bonds to Bank A, then initially the...
If the Fed sells $15 million worth of government bonds to Bank A, then initially the amount of deposits held by Bank A will increase by $15 million. O the amount of reserves held by Bank A will decrease by $15 million. O the amount of bonds held by Bank A will decrease by $ 15 million. O the amount of deposits held by Bank A will decrease by $15 million. O the amount of reserves held by Bank A...
When the Federal Reserve conducts open market operations, it buys or sells government bonds. buys and...
When the Federal Reserve conducts open market operations, it buys or sells government bonds. buys and sells foreign currency. manipulates of the rate at which it loans to member banks. increases or decreases the required reserve ratio. How will the Fed's policy action change the money supply? Use only the actions corresponding to your choice in the previous part. The money supply increases The money supply decreases Answer Bank Answer Bank The Fed sells foreign currency The Fed buys bonds...
4- When the Fed conducts open-market sales, a. it sells Treasury securities, which decreases the money...
4- When the Fed conducts open-market sales, a. it sells Treasury securities, which decreases the money supply. b. it lends money to member banks, which decreases the money supply. c. it borrows from member banks, which increases the money supply. d. it sells Treasury securities, which increases the money supply. 5- When the government levies a $100 million tax on people's income and puts the $100 million back into the economy in the form of a spending program such as new...
1. Describe how the balance sheet of the Fed is affected under each of these scenarios...
1. Describe how the balance sheet of the Fed is affected under each of these scenarios (point out changes to both assets and liabilities) and defend your answer: (a) The Fed sells S1 million dollar's worth of government bonds to banks. (b) $1 million dollar's worth of mortgage-backed securities held by the Fed expire and are paid in full by the issuers of those securities (c) S1 million dollar's worth of mortgage-backed securities held by the Fed expire and only...
of 40> Suppose the Fed sells $500 billion in government securities and the reserve ratio is...
of 40> Suppose the Fed sells $500 billion in government securities and the reserve ratio is 0.1. Calculate the resulting change in the money supply. Be certain to include a negative sign. change in the money supply: $ billion Next, show the impact this open market operation wilEhave on the graph in the short run 10 Solow growth curve Short-run aggregate supply 7 Next, show the impact this open market operation will have on the graph in the short run....
The Fed sells $4.9 billion in German government bonds, denominated in euros. What happens to the...
The Fed sells $4.9 billion in German government bonds, denominated in euros. What happens to the Fed's international reserves and the monetary base? Is this a sterilized or an unsterilized foreign exchange intervention? The Fed's international reserves (do not change / increase by $4.9 billion / decrease by $4.9 billion), and the monetary base (decreases by $4.9 billion / increases by $4.9 billion / does not change). This is (a sterilized / an unsterilized) intervention.
If the Fed sells government bonds to the public, then reserves? a) increase and the...
If the Fed sells government bonds to the public, then reserves? a) increase and the money supply increases. b) increase and the money supply decreases. c) decrease and the money supply increases. d) decrease and the money supply decreases.
1) When the Fed purchases U.S. treasury securities, bank reserves will Select one: A. expand and...
1) When the Fed purchases U.S. treasury securities, bank reserves will Select one: A. expand and the fed funds rate will rise. B. contract and the fed funds rate will rise. C. expand and the fed funds rate will fall. D. contract and the fed funds rate will fall. 2) Open market operations may be best described as the FOMCs buying or selling of Select one: A. U.S. government securities in the financial markets. B. foreign currencies in foreign exchange...
When the Bank of Canada wants to expand the money supply, it_ government securities, which the reserves of commercial banks. O A. sells, has no effect on O B. sells, increases O C. purchases, decreases OD. purchases, increases O E. sells, decreases
If the Fed sells $15 million worth of government bonds to Bank A, then initially the amount of deposits held by Bank A will increase by $15 million. O the amount of reserves held by Bank A will decrease by $15 million. O the amount of bonds held by Bank A will decrease by $ 15 million. O the amount of deposits held by Bank A will decrease by $15 million. O the amount of reserves held by Bank A...
When the Federal Reserve conducts open market operations, it buys or sells government bonds. buys and sells foreign currency. manipulates of the rate at which it loans to member banks. increases or decreases the required reserve ratio. How will the Fed's policy action change the money supply? Use only the actions corresponding to your choice in the previous part. The money supply increases The money supply decreases Answer Bank Answer Bank The Fed sells foreign currency The Fed buys bonds...
1. Describe how the balance sheet of the Fed is affected under each of these scenarios (point out changes to both assets and liabilities) and defend your answer: (a) The Fed sells S1 million dollar's worth of government bonds to banks. (b) $1 million dollar's worth of mortgage-backed securities held by the Fed expire and are paid in full by the issuers of those securities (c) S1 million dollar's worth of mortgage-backed securities held by the Fed expire and only...
of 40> Suppose the Fed sells $500 billion in government securities and the reserve ratio is 0.1. Calculate the resulting change in the money supply. Be certain to include a negative sign. change in the money supply: $ billion Next, show the impact this open market operation wilEhave on the graph in the short run 10 Solow growth curve Short-run aggregate supply 7 Next, show the impact this open market operation will have on the graph in the short run....
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