OPTION C
If the Fed buys securities there will be O A decrease in reserves and an increase...
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.
What happens after the Fed buys securities on the open market (assume the demand for reserves is downward sloping)? A. Supply of reserves shifts leftward and federal funds rate increases B. Supply of reserves shifts rightward and federal funds rate declines C. Supply of reserves shifts leftward and federal funds rate declines D. Supply of reserves shifts rightward and federal funds rate increases
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...
A Fed purchase of securities from commercial banks will cause all of the following EXCEPT: a rise in bank reserves. an increase in the money supply. a change in the money multiplier. a decrease in the interest rate.
Lowering the discount rate will A. decrease reserves, encourage banks to make fewer loans, and increase the money supply. B. increase reserves, encourage banks to make more loans, and increase the money supply. C. decrease reserves, encourage banks to make fewer loans, and decrease the money supply. D. increase reserves, encourage banks to make more loans, and decrease the money supply.
If the Fed has an interest-rate target, why will an increase in the demand for reserves lead to a rise in the money supply? Use a graph of the market for reserves to explain.
Currently, output is substantially lower than potential output. Now the Fed buys securities, we would expect to see the following occur: an unanticipated decrease in business inventories. a decrease in planned investment because securities are scarcer. an increase in production as inflation erodes spending power. a decrease in the interest rate because the demand for money has decreased.
Explain the effect on the demand for reserves or the supply of reserves of the following Fed policy action: an open market sale of government securities a. this would decrease the demand for reserves b. this would increase the supply for reserves c. this would decrease the supply for reserves d. this would lower the interest rate at which the supply for reserves becomes horizontal
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...
A sale of bonds by the Fed generates O A. an increase in the demand for money balances. O B. an increase in the demand for bonds and a rise in bond prices, OC. a decrease in the demand for money balances, O D. an increase in the supply of bonds and a fall in bond prices