10. An open market sale of Treasury securities ___________ the price of Treasury securities, thereby __________...
10. An open market sale of Treasury securities ___________ the price of Treasury securities, thereby __________ the yield on Treasury securities. This sale of Treasury securities __________ the monetary base and __________ the money supply.
a. Decreases, increases, decreases, decreases
b. Increases, decreases, increases, decreases
c. Increases, decreases, increases, increases
d. Decreases, increases, increases, decreases
Homework Answers
An open market sale of treasury securities decreases the price of treasury securities, thereby increasing the yield on treasury securities. This sales of treasury securities decreases the monetary base and decreases the money supply.
The right answer is a.
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10. An open market sale of Treasury securities ___________ the
price of Treasury securities, thereby __________...
An open market purchase A. decreases the price of Treasury securities and increases their yield. B....
An open market purchase A. decreases the price of Treasury securities and increases their yield. B. decreases the price of Treasury securities and also decreases their yield. C. increases the price of Treasury securities and decreases their yield. D. increases the price of Treasury securities and also increases their yield.
Fill in the blank with increases or decreases The open market sale of securities by the...
Fill in the blank with increases or decreases The open market sale of securities by the fed results in a ____ in reserves and ____ in the supply of money
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...
Which one of the following is the result of a contractionary open market operation by the...
Which one of the following is the result of a contractionary open market operation by the Bank of England? a. The price of Treasury Bills rises, the short term rate of interest falls and the money supply increases b. The price of Treasury Bills falls, the short term rate of interest falls and the money supply decreases. c. The price of Treasury Bills falls, the short term rate of interest rises and the money supply decreases d. The price of...
Question 17 When the Federal Reserve purchases a Treasury security on the open market, the money...
Question 17 When the Federal Reserve purchases a Treasury security on the open market, the money supply and the federal funds rate increases, increases increases, decreases decreases, increases decreases, decreases
13. If the Fed conducts Open Market Purchase, then: a. price of bonds increase, interest rates decrease and money supply...
13. If the Fed conducts Open Market Purchase, then: a. price of bonds increase, interest rates decrease and money supply decreases. b. price of bonds decrease, interest rates increase and money supply decreases. c. price of bonds increase, interest rates decrease and money supply increases. d. price of bonds decrease, interest rates decrease and money supply increases.
5) The Fed makes an open market sale of $500 in bonds to a bank for...
5) The Fed makes an open market sale of $500 in bonds to a bank for reserves. The reserve requirement is 10%. Show the changes on the balances sheets of the Fed and the bank. What is the change in the monetary base? What is the change in the money supply? You can use the simple formula for the money multiplier.
Discussion Questions for Tuesday, Apr. 23 1. Suppose the Fed conducts $10 million open market pur...
Discussion Questions for Tuesday, Apr. 23 1. Suppose the Fed conducts $10 million open market purchase from Bank A. If Bank A and all the other banks use reserves to purchase only securities, what will happen to deposits in the banking system and how much does it expand? 2. Let's assume that in a hypothetical economy currency in circulation is $600 billion, the amount of checkable deposits is $900 billion, excess reserves are $15 billion and required reserve ratio is...
With the case of an open-market sale of securities by the central bank, we should most...
With the case of an open-market sale of securities by the central bank, we should most likely expect (ceteris paribus) a. an excess demand for bonds. b. increase in the level of GDP. c. monetary stimulus for the domestic economy. d. depreciation of the currency in foreign exchange. e. higher rates of inflation.
When the Fed conducts an open market purchase, the Fed buys securities from banks and the...
When the Fed conducts an open market purchase, the Fed buys securities from banks and the money supply increases As a result of the open market purchase, the O A. 0 B. ° C. money demand curve will shift to the left. money supply curve will shift to the left. money supply curve will shift to the right. OD. money demand curve will tthe right The new equilibrium will be where O A. the new money supply curve intersects the...
Which one of the following is the result of a contractionary open market operation by the Bank of England? a. The price of Treasury Bills rises, the short term rate of interest falls and the money supply increases b. The price of Treasury Bills falls, the short term rate of interest falls and the money supply decreases. c. The price of Treasury Bills falls, the short term rate of interest rises and the money supply decreases d. The price of...
Question 17 When the Federal Reserve purchases a Treasury security on the open market, the money supply and the federal funds rate increases, increases increases, decreases decreases, increases decreases, decreases
Discussion Questions for Tuesday, Apr. 23 1. Suppose the Fed conducts $10 million open market purchase from Bank A. If Bank A and all the other banks use reserves to purchase only securities, what will happen to deposits in the banking system and how much does it expand? 2. Let's assume that in a hypothetical economy currency in circulation is $600 billion, the amount of checkable deposits is $900 billion, excess reserves are $15 billion and required reserve ratio is...
When the Fed conducts an open market purchase, the Fed buys securities from banks and the money supply increases As a result of the open market purchase, the O A. 0 B. ° C. money demand curve will shift to the left. money supply curve will shift to the left. money supply curve will shift to the right. OD. money demand curve will tthe right The new equilibrium will be where O A. the new money supply curve intersects the...
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