ZuoTi.Pro
Question

Suppose the Fed has decided to lower the Interest rate pald on excess reserves. The goal of this policy is to O decrease Inve
business   economics   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

If the fed decides to lower interest rate on excess reserves then its goal is to increase investment and aggregate demand. So the answer here will be B.

0 0
Add a comment
Know the answer?
Add Answer to:
Suppose the Fed has decided to lower the Interest rate pald on excess reserves. The goal...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • If the Fed has an interest-rate target, why will an increase in the demand for reserves...

    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.

  • Explain the effect on the demand for reserves or the supply of reserves of the following...

    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

  • 15. Suppose a bank has $3,000 in reserves, $25,000 of deposits, and a 10 percent reserve...

    15. Suppose a bank has $3,000 in reserves, $25,000 of deposits, and a 10 percent reserve requirement. What is the amount of excess reserves? ________________________ 16. The U.S unemployment rate for November 2018 fell to 3.7%, the lowest since 2000 after sitting at 4.1% for six consecutive months. What does this tells us about the U.S economy? What it doesn’t tell us about the U.S economy? Is this a perfect indicator of the U.S labor market? Why/why not? ___________________________________________________________________ _______________________________________________________________________________________________________________________________________________________....

  • Question 2 (3 points) Suppose the economy currently is in a recessionary gap. The Fed engages...

    Question 2 (3 points) Suppose the economy currently is in a recessionary gap. The Fed engages in expansionary monetary policy. The impact of expansionary monetary policy will be to increase aggregate demand, increase prices, and increase real GDP - increase aggregate demand, increase prices, and decrease real GDP increase short-run aggregate supply, decrease in prices, and decrease in real GDP o increase short-run aggregate supply, decrease prices, and increase real GDP Page 2 of 30 Previous Page Next Page

  • Question 28 (3 points) Suppose the economy currently is in a recessionary gap. The Fed engages...

    Question 28 (3 points) Suppose the economy currently is in a recessionary gap. The Fed engages in expansionary monetary policy. The impact of expansionary monetary policy will be to increase short-run aggregate supply, decrease prices, and increase real GDP increase aggregate demand, increase prices, and increase real GDP increase aggregate demand, increase prices, and decrease real GDP increase short-run aggregate supply, decrease in prices, and decrease in real GDP

  • Suppose an economy has $200,000 of demand deposits and $40,000 of excess reserves, with a 10%...

    Suppose an economy has $200,000 of demand deposits and $40,000 of excess reserves, with a 10% required reserve ratio. If the monetary authorities lower the required reserve ratio to 2%: A. the excess reserves will fall by 10%. B. the excess reserves will rise. C. excess reserves will decrease by $20,000. D. there will be no more excess reserves in the system.

  • answer these will rate after If the Fed increases the discount rate, banks will face a...

    answer these will rate after If the Fed increases the discount rate, banks will face a higher cost of borrowing and will pass some of this cost onto customers in terms of higher interest rates. O it will be easier for banks to borrow the money needed to provide a higher volume of commercial loans. O it will then increase the required reserve ratio as well. O it will then decrease the required reserve ratio to offset any possible contractionary...

  • If at some specific interest rate the quantity of money demanded is less than the quantity...

    If at some specific interest rate the quantity of money demanded is less than the quantity of money supplied, people will desire to buy interest-earning assets causing the interest rate to decrease. Select one: True False In recent years, the Fed has conducted policy by setting a target for the federal funds rate. Select one: True False A decrease in taxes is an expansionary fiscal policy designed to increase aggregate demand and reduce unemployment. Select one: True False If aggregate...

  • Assume that banks do not hold excess reserves and that households do not hold currency

    Assume that banks do not hold excess reserves and that households do not hold currency, so the only form of money is demand deposits. To simplify the analysis, suppose the banking system has total reserves of $400. Determine the money multiplier and the money supply for each reserve requirement listed in the following table. A higher reserve requirement is associated with a _______ money supply. Suppose the Federal Reserve wants to increase the money supply by $200. Again, you can assume that...

  • Question 1 1 pts Suppose that in the market for reserves, the federal funds rate is...

    Question 1 1 pts Suppose that in the market for reserves, the federal funds rate is both, less than the discount rate (iff < id), and above the rate paid on excess reserves (iff > Por). If the Federal Reserve Bank elects to decrease the required reserve ratio, then we would expect the_ curve for reserves to shift and the equilibrium interest rate to . O demand; fall O demand; rise o supply; rise O supply; fall

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT