Homework Answers
Option D
Explanation: The Federal Reserve started paying interest on the excess reserves, which has resulted in a substantial increase in excess reserve.
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36) The excess reserve ratio rose from 0.003 in 2007 to 1.06 in 2017 due to...
30) Assuming initially that the required reserve ratio = 15%, the currency-deposit ratio = 40%, and...
30) Assuming initially that the required reserve ratio = 15%, the currency-deposit ratio = 40%, and the excess reserve ratio = 5%, a decrease in the excess reserve ratio to 0% causes the MI money multiplier to everything else held constant. A) increase from 1.67 to 1.82 10 .11 B ) decrease from 1.82 to 1.67 C) decrease from 2.55 to 2.33 to D) increase from 2.33 to 2.55 35) Which of the following is not a component of the...
Please answer all the questions?, thank you. Question 1 1 pts The required reserve ratio is...
Please answer all the questions?, thank
you.
Question 1 1 pts The required reserve ratio is the: O actual amount of reserves that banks must hold excess amount of reserves that a bank must hold O minimum amount of reserves the Fed requires a bank to hold. O total amount of reserves that banks hold at all times. Question 2 1 pts The discount rate is the interest rate: O commercial banks charge their low-risk customers for a loan. O...
Consider the following Bank balance sheet (assume Reserve Requirement Ratio is zero) Liabilities Assets Excess Reserves...
Consider the following Bank balance sheet (assume Reserve Requirement Ratio is zero) Liabilities Assets Excess Reserves +10M Deposits +100M Government Bonds £20M Loans Ł80M Bank Capital +10M a. Suppose interest rate on loans and government bonds is 10%, interest rate on deposits is 8%, and interest rate on excess reserves is 0%. What is the Bank's net return on assets? Compute the return on equity. b. Suppose the risk weights imposed by the bank regulator on loans, securities, and reserves...
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...
True/False (1 Point each) 1) When bond prices decrease, their yields to maturity increase. 2) The...
True/False (1 Point each) 1) When bond prices decrease, their yields to maturity increase. 2) The best forms of money and financial systems enjoy the benefits of trust, belief, and stability. 3) A fundamental function of a commercial bank is to take in deposits and make loans. 4) Traditional banks operate with low margins and high leverage. 5) Rates on bonds issued by a government can be negative. 6) ) The default risk premium is the same as the credit...
Chapter 12: What is money? What are the three functions of money? What is the difference...
Chapter 12: What is money? What are the three functions of money? What is the difference between fiat money and commodity money? How can banks affect the money supply? What is the reserve ratio? What is the money multiplier? How did banking develop? How are required reserves different from excess reserves? Know the differences between bond markets, stock markets, banks, and mutual funds, and know the characteristics of bonds, stocks, banks, and mutual funds. How do banks help solve problems...
answer please 25. A bank borrows money from another bank on an overnight basis to meet...
answer please
25. A bank borrows money from another bank on an overnight basis to meet reserve requirements in the: a. stock market. b. bond market. c. Federal funds market. d. U.S.Treasury bill market. 26. Fiscal policy in the United States is the responsibility of the: a. US Treasury b. Federal Reserve c. Internal Revenue Service d. US Congress and Administration 27. Monetary policy in the United States is the responsibility of the: b. Federal Reserve a. US Treasury c....
2006, interest rates increased from 5% to 7%, when this happens consumers are A. less likely...
2006, interest rates increased from 5% to 7%, when this happens consumers are A. less likely to save, that is, sell a financial asset. B. more likely to save, that is, sell a financial asset. C. less likely to save, that is, purchase a financial asset. D. more likely to save, that is, purchase a financial asset. I. In 2. If commercial banks hold all their assets in the form of required reserves: A. only they will be able to...
Questions 1 to 10 are false statements. Please re-write each statement so that it is true....
Questions 1 to 10 are false statements. Please re-write each statement so that it is true. It may be as simple as one word change or more complex. 3. Money market security prices and yields are more sensitive to changes in interest rates than long-term corporate bonds. 4. The majority of money market securities are low denomination, low risk investments designed to appeal to individual investors with excess cash. 5. Most money market securities are initially sold to individual investors....
Read the article on China’s Forex Reserve . In your opinion and from the article, why had China’s foreign reserve kept d...
Read the article on China’s Forex Reserve . In your opinion and from the article, why had China’s foreign reserve kept dropping? What would be the Chinese government’s motivation in lowering its foreign reserve at the time the article was published? China Foreign-Exchange Reserves Keep Dropping; Reserves fall to lowest levels in nearly six years, testing central bank's resolve to stabilize the yuan Wei, Lingling . Wall Street Journal (Online); New York, N.Y. [New York, N.Y] 08 Jan 2017: n/a....
30) Assuming initially that the required reserve ratio = 15%, the currency-deposit ratio = 40%, and the excess reserve ratio = 5%, a decrease in the excess reserve ratio to 0% causes the MI money multiplier to everything else held constant. A) increase from 1.67 to 1.82 10 .11 B ) decrease from 1.82 to 1.67 C) decrease from 2.55 to 2.33 to D) increase from 2.33 to 2.55 35) Which of the following is not a component of the...
Please answer all the questions?, thank
you.
Question 1 1 pts The required reserve ratio is the: O actual amount of reserves that banks must hold excess amount of reserves that a bank must hold O minimum amount of reserves the Fed requires a bank to hold. O total amount of reserves that banks hold at all times. Question 2 1 pts The discount rate is the interest rate: O commercial banks charge their low-risk customers for a loan. O...
Consider the following Bank balance sheet (assume Reserve Requirement Ratio is zero) Liabilities Assets Excess Reserves +10M Deposits +100M Government Bonds £20M Loans Ł80M Bank Capital +10M a. Suppose interest rate on loans and government bonds is 10%, interest rate on deposits is 8%, and interest rate on excess reserves is 0%. What is the Bank's net return on assets? Compute the return on equity. b. Suppose the risk weights imposed by the bank regulator on loans, securities, and reserves...
answer please
25. A bank borrows money from another bank on an overnight basis to meet reserve requirements in the: a. stock market. b. bond market. c. Federal funds market. d. U.S.Treasury bill market. 26. Fiscal policy in the United States is the responsibility of the: a. US Treasury b. Federal Reserve c. Internal Revenue Service d. US Congress and Administration 27. Monetary policy in the United States is the responsibility of the: b. Federal Reserve a. US Treasury c....
2006, interest rates increased from 5% to 7%, when this happens consumers are A. less likely to save, that is, sell a financial asset. B. more likely to save, that is, sell a financial asset. C. less likely to save, that is, purchase a financial asset. D. more likely to save, that is, purchase a financial asset. I. In 2. If commercial banks hold all their assets in the form of required reserves: A. only they will be able to...
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