In which of the following cases does the quantity of money supply (MS) in the money...
In which of the following cases does the quantity of money supply (MS) in the money market decrease?
a.The Fed buys bonds in open-market operations.
b.The Fed raises the reserve requirement.
c.The Fed decreases the interest rate it pays on reserves(on required and excess reserves).
d.The Federal Open Market Committee (FOMC) decreases its target for the federal funds rate and market interest rates.
e.The Fed decreases the discount rate that it charges banks.
f.None of the above.
Homework Answers
b. The fes raises the reserve requirement.
Increase in reserve requirement decreases the quantity of money banks can loan out which leads to decrease in money supply.
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In which of the following cases does the quantity of money
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question 15
QUESTION 15 Interest MS Rate MS, Interest Rate Iz Planned Investment Quantity of Money Price Level LRAS SRAS, SRAS AD AD Real GDP in Trillions per Year In the above figure, suppose the economy is at a short-run equilibrium at point and the interest rate is r 2. Which of the following policy options for the Fed will help solve the short-run situation? open market sale of government securities lowering the differential between the discount rate and the...
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question 15
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