Ans: D) An increase in the supply of bonds and a fall in bond price
Explanation:
A sale of bonds by the Fed under the open market operations generates an increase in the supply of bonds. As a result the price of existing bond will fall.
A sale of bonds by the Fed generates O A. an increase in the demand for...
s whioh of the folowing is a tool used by the Fed in the oassiet of monetary policy 8 asung new governent bonds and retiring old ones ing nt seiling coporate bonds OD ing and selling feder al government bonds 10. If the Fed buys government bonds through open market operations, it will OA increase the demand for bonds in the bond market O & decrease the demand for bonds in the bond market. С ¡crease the supply of bonds...
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.
8. The Fed conducts an open market sale of bonds, $50 million, and the reserve ratio is 20% before and after the sale a. Does the money supply INCREASE or DECREASE? (circle) b. How much does the money supply change?_
5. In the Keynesian model which of the following would be most likely to have the largest impact on aggregate demand a. an increase in the money supply b. a change in government expenditure c. a change in investment expectations d. both a and c e. both b and c 6. In the Keynesian theory of liquidity demand and the interest rate which of the following occurs during excess supply of money. a. individuals sell bonds, driving interest rates down...
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.
If the Fed buys securities there will be O A decrease in reserves and an increase in the money supply. O An increase in reserves and a decrease in the money supply. An increase in reserves and an increase in the money supply. A decrease in reserves and a decrease in the money supply.
2 point 9. Which of the following is a tool used by the Fed in the conduct of monetary policy? O A. changes in the prime rate O B. issuing new government bonds and retiring old ones O c. buying and selling corporate bonds O D. buying and selling federal government bonds 10. If the Fed buys government bonds through open-market operations, it 2 points will O A. Increase the demand for bonds in the bond market. O B. decrease...
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Suppose that the liquidity effect is immediate and smaller than the other effects, and our expectations of inflation adjust quickly. Referring to the graphs on the right, choose the time path of interest rates from an increase in the growth rate of the money supply that occurs at time T." O A. GraphB O B. Graph A Interest Rate When the...
Interest rate (percent per year) 7- The figure shows the demand for money curve in Epsilon. Draw the supply of money curve if the Fed wants the interest rate to be 6 percent a year. Label it. Draw a point at the equilibrium in the money market. 6- bonds. If the interest rate is 5 percent, people will Bond prices will 5- 4- O A. sell; rise OB. buy, fall O C. sell; fall OD. buy, rise MD The interest...
10. Open-market purchases of government bonds by the Fed will have the tendency to: A) Increase interest rates, the money supply, and national income. B) Increase interest rates and the money supply, but decrease national income. C) Increase interest rates, but decrease the money supply and national income. D) Decrease interest rates, but increase the money supply and national income. E) Decrease interest rates, the money supply, and national income. 11. Aggregate demand would tend to be shifted up by...