Homework Answers
28) The movement from point A to B in the money market is because of (C) an open market sale of treasury by Fed. When there is an open market sale of TBs the money supply in the economy decreases because people and banks use currency holdings to buy them. Thus there is a contraction of money supply in economy.
29) When Fed buys TBs, it would issue more currency to buy it. This would increase the money supply in the economy. Thus, shifting the MS curve to the right. So, the correct option is (A).
Add Answer to:
Figure 15-3 27) Refer to Figure 15-3. In the figure above, the movement from point A...
Figure 16-3 Interest Rate \Do Quantity of Money Figure 16-3 shows the impact of deficit spending...
Figure 16-3 Interest Rate \Do Quantity of Money Figure 16-3 shows the impact of deficit spending and the corresponding economic expansion on the demand curve for money. If the Federal Reserve does not want interest rates to rise, it will a. shift the money supply curve to the right by monetizing the deficit b. shift the money supply curve to the left by open market sales of government securities c. maintain the current targets for both M1 and M2 money...
On March 15, 2017, Federal Reserve Chairman Janet L. Yellen announced the Federal Reserve was raising...
On March 15, 2017, Federal Reserve Chairman Janet L. Yellen announced the Federal Reserve was raising its benchmark rate (the federal funds rate) by a quarter of a percentage point (to a range of 0.75-1.00 percent). This was the third time the Fed has raised rates after the Great Recession. Consider the market for money illustrated in the figure below. Assume the market initially just prior to March 15, 2017) is in equilibrium at point A. Describe the effects of...
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...
6. (Problem 6) An economy is facing the inflationary gap shown in the accompanying diagram. Aggregate...
6. (Problem 6) An economy is facing the inflationary gap shown in the accompanying diagram. Aggregate price level LRAS SRAS Real GDP Potential —YpY output To eliminate the gap, should the central bank use expansionary or contractionary monetary policy? How will the interest rate, investment spending, consumer spending, real GDP, and the aggregate price level change as monetary policy closes the inflationary gap? The central bank can use contractionary monetary policy. The interest rate will rise, which would encourage a...
Suppose the Fed wanted to engage in an expansionary monetary policy. Which of the following should...
Suppose the Fed wanted to engage in an expansionary monetary policy. Which of the following should it do? a. Increase the reserve requirement ratio. b. Buy bonds on the open market. c. Sell bonds on the open market. d. Lower taxes. e. Increase the discount rate. The interest rate at which banks can borrow funds from the Fed is known as… a. the federal funds rate. b. the discount rate. c. the prime rate. d. the real interest rate. e....
1.What could the Federal Reserve have done to fight the Great Depression? a.Increase the money supply...
1.What could the Federal Reserve have done to fight the Great Depression? a.Increase the money supply to reduce the interest rate. b.Increase the money supply to raise the interest rate. c.Decrease the money supply to reduce the interest rate. d.Decrease the money supply to raise the interest rate. 2. How could the government have used fiscal policy to fight the Great Depression? a.Reduce taxes, raise transfers, raise government purchases. b.Reduce taxes, reduce transfers, reduce government purchases. c.Raise taxes, reduce transfers,...
20. Banks decide to raise the interest rate they pay on checking accoun action would A)...
20. Banks decide to raise the interest rate they pay on checking accoun action would A) increase money demand, shifting the LM curve up and to the ci B) increase money demand, shiftino the IM curve down and to the C) decrease money demand, shifting the M curve up and to the tem D) decrease money demand, shifting the LM curve down and to cing accounts from 1% to 2%. This curve down and to the right. & the LM...
It is not necessary to write detail answer, some question is easy to find answer, you...
It is not necessary to write detail answer, some question is
easy to find answer, you dont need to explain in detail, thank you
:)
7. Everything else held constant, if aggregate output is to the right of the LM curve, then there is an excess of money which will cause the interest rate to A) supply; fall- B) supply; rise- C) demand; fall- D) demand; rise- t 8. If the economy is on the LM curve, but is to...
Question 17 (1 point) With the onset of the 2007-2008 Great Recession, the Fed, led by...
Question 17 (1 point) With the onset of the 2007-2008 Great Recession, the Fed, led by Fed Chairman Ben Bernanke (2006- 2014), lowered its target interest rate (the federal funds rate) to a range of 0.00-0.25 percent. This was done with 7 rate cuts during 2008, after several in 2007. Consider the market for money illustrated in the figure below. Assume the market initially (just prior to Great Recession) is in equilibrium at point A. Describe the effects the Fed's...
136) Assuming all else equal, if a bank expects a bank run in the future: 136) A) there will be an upward movement along its demand curve for reserves. B) there will be a downward movement along its d...
136) Assuming all else equal, if a bank expects a bank run in the future: 136) A) there will be an upward movement along its demand curve for reserves. B) there will be a downward movement along its demand curve for reserves. C) its demand curve for reserves will shift to the right. D) its demand curve for reserves will shift to the left. 137) Which of the following will NOT cause a shift in the demand curve for reserves?...
Figure 16-3 Interest Rate \Do Quantity of Money Figure 16-3 shows the impact of deficit spending and the corresponding economic expansion on the demand curve for money. If the Federal Reserve does not want interest rates to rise, it will a. shift the money supply curve to the right by monetizing the deficit b. shift the money supply curve to the left by open market sales of government securities c. maintain the current targets for both M1 and M2 money...
On March 15, 2017, Federal Reserve Chairman Janet L. Yellen announced the Federal Reserve was raising its benchmark rate (the federal funds rate) by a quarter of a percentage point (to a range of 0.75-1.00 percent). This was the third time the Fed has raised rates after the Great Recession. Consider the market for money illustrated in the figure below. Assume the market initially just prior to March 15, 2017) is in equilibrium at point A. Describe the effects of...
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...
6. (Problem 6) An economy is facing the inflationary gap shown in the accompanying diagram. Aggregate price level LRAS SRAS Real GDP Potential —YpY output To eliminate the gap, should the central bank use expansionary or contractionary monetary policy? How will the interest rate, investment spending, consumer spending, real GDP, and the aggregate price level change as monetary policy closes the inflationary gap? The central bank can use contractionary monetary policy. The interest rate will rise, which would encourage a...
20. Banks decide to raise the interest rate they pay on checking accoun action would A) increase money demand, shifting the LM curve up and to the ci B) increase money demand, shiftino the IM curve down and to the C) decrease money demand, shifting the M curve up and to the tem D) decrease money demand, shifting the LM curve down and to cing accounts from 1% to 2%. This curve down and to the right. & the LM...
It is not necessary to write detail answer, some question is
easy to find answer, you dont need to explain in detail, thank you
:)
7. Everything else held constant, if aggregate output is to the right of the LM curve, then there is an excess of money which will cause the interest rate to A) supply; fall- B) supply; rise- C) demand; fall- D) demand; rise- t 8. If the economy is on the LM curve, but is to...
Question 17 (1 point) With the onset of the 2007-2008 Great Recession, the Fed, led by Fed Chairman Ben Bernanke (2006- 2014), lowered its target interest rate (the federal funds rate) to a range of 0.00-0.25 percent. This was done with 7 rate cuts during 2008, after several in 2007. Consider the market for money illustrated in the figure below. Assume the market initially (just prior to Great Recession) is in equilibrium at point A. Describe the effects the Fed's...
Most questions answered within 3 hours.
-
An animal whose limb temperature is colder compared to the core
is displaying....
d. counter current...
asked 39 seconds from now -
Find the expected value E(X), the variance Var(X) and the
standard deviation σ(X) for each of...
asked 1 hour ago -
home / study / science / physics / physics questions and answers
/ 2. an object...
asked 21 minutes ago -
What do you think every computer science department must teach,
concerning the fact that technology rapidly...
asked 19 minutes ago -
An open cart is travelling at constant speed on a level surface.
A load of coal...
asked 24 minutes ago -
A ski-jumper leaves the ski track moving in the horizontal
direction with a speed of 25.0...
asked 33 minutes ago -
A commercial lubricant, Dubdeefordy, has K = SN/SM = 13.1 for
immiscible solvent M and N....
asked 56 minutes ago -
Are there any potential drawback to the job-crafting approach?
If so, how can they be minimized?
asked 34 minutes ago -
12. To accommodate growth until a new version of IP could be
standardized and adopted, a...
asked 38 minutes ago -
Create a separation scheme flow chart/diagram to isolate methyl
salicylate from a product mixture containing the...
asked 39 minutes ago -
5. The animals of which phylum use a water vascular system in
locomotion, feeding and gas...
asked 1 hour ago -
*HOW DO I CHANGE THIS FROM A VOID FUNCTION TO A NON-VOID
WITH PARAMETERS?*
#include<iostream>
#include<fstream>...
asked 52 minutes ago