Homework Answers
5.
Money multiplier= 1/ required reserve
When the required reserve ratio will increase, the money multiplier will decrease. Hence the money supply will decrease. This is because money supply is calculated as;
Money supply= Money multiplier* change in deposit.
Since the money supply decreases, therefore interest rate increases.
Hence option fourth is the correct answer.
6.
Since the discount rate is the rate at which the Central Bank lends to the Commercial Banks. Hence when there is a decrease in the discount rate, there will be more borrowing by the commercial banks. Hence money supply will increase in the economy.
Hence option first is the correct answer.
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Incorrect Question 5 0/2 pts Increasing the required reserves ratio will increase: money supply consumption aggregate...
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
5) If consumption increases by $200 and, in response, equilibrium aggregate expenditure increases by $600, the...
5) If consumption increases by $200 and, in response, equilibrium aggregate expenditure increases by $600, the multiplier is A) 5 B) 0.5.C)2. D) 0.3. 6) When the GDP in Kuwait rises relative to the GDP in other countries, will fall and will fall A) exports; imports B) exports; net exports C) imports; net exports D) net exports; imports 7) An increase in the price level will A) shift the aggregate demand curve to the left. B) shift the aggregate demand...
In the AD–AS diagram, an increase in money supply growth causes: a shift of the aggregate...
In the AD–AS diagram, an increase in money supply growth causes: a shift of the aggregate demand curve to the left. a shift of the aggregate demand curve to the right. a downward movement along the aggregate demand curve. an upward movement along the aggregate demand curve.
An increase in the price level will A) shift the aggregate demand curve to the left.
7) An increase in the price level will A) shift the aggregate demand curve to the left. B) shift the aggregate demand curve to the right. C) move the economy up along the aggregate demand curve. D) move the economy down along the aggregate demand curve. 8) Expansionary monetary policy involves A) reducing money supply and lowering taxes B) increasing money supply to decrease interest rate C) increasing government spending and cutting money supply D) increasing the interest rate and increasing taxes 9) Long-run macroeconomic equilibrium occurs when A) aggregate demand...
rect Question 2 0/1 pts The money supply equals monetary base plus money multiplier. • monetary...
rect Question 2 0/1 pts The money supply equals monetary base plus money multiplier. • monetary base divided by money multiplier. money multiplier divided by monetary base. money multiplier multiplied by monetary base. Incorrect Question 3 0/1 pts If the MI multiplier is 3 and the Fed engages in open-market purchases in the amount of S3 billion. then monetary base will increase by S3 billion decline by S9 billion. decline by S3 billion. • increase by $9 billion. rect Question...
Question 8 The theory of liquidity preference implies that an increase in the price level shifts...
Question 8 The theory of liquidity preference implies that an increase in the price level shifts the Not yet answered Marked out of 2.00 Flag question Select one: a money demand curve to the right, so the interest rate decreases. b. money demand curve to the left, so the interest rate decreases. 0 C. money demand curve to the right, so the interest rate increases. 0 d. money demand curve to the left, so the interest rate increases. Question 9...
In an economy where the money supply and aggregate demand have been decreased by the Central...
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Aggregate Demand and Aggregate Supply Work It Out: Question 2 of 4 Determine whether each of the following events cause...
Aggregate Demand and Aggregate Supply Work It Out: Question 2 of 4 Determine whether each of the following events causes a shift of a curve or a movement along a curve in the short run Indicate which curve is involved and the direction of the change. An increase in the quantity of money by the Federal Reserve increases the quantity of money that people wish to lend lowering interest rates. This will cause a the aggregate curve to the
1. Which of the following is incorrect? a. The reserves held in excess of required reserves...
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need all 5 answeres If the monetary base is $1,000 billion, checkable deposits are $2,000 billion,...
need all 5 answeres
If the monetary base is $1,000 billion, checkable deposits are $2,000 billion, the required reserve ratio is 10%, and excess reserves are $500 billion, then the currency in circulation are $500 billion, then 92,000 billion. A) $200 billion B) $300 billion. C) $450 billion. D) $700 billion. When the Federal Reserve wants to raise interest rates after banks have accumulated large amounts of excess reserves (i.e., when the supply curve intersects the demand curve at the...
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
5) If consumption increases by $200 and, in response, equilibrium aggregate expenditure increases by $600, the multiplier is A) 5 B) 0.5.C)2. D) 0.3. 6) When the GDP in Kuwait rises relative to the GDP in other countries, will fall and will fall A) exports; imports B) exports; net exports C) imports; net exports D) net exports; imports 7) An increase in the price level will A) shift the aggregate demand curve to the left. B) shift the aggregate demand...
rect Question 2 0/1 pts The money supply equals monetary base plus money multiplier. • monetary base divided by money multiplier. money multiplier divided by monetary base. money multiplier multiplied by monetary base. Incorrect Question 3 0/1 pts If the MI multiplier is 3 and the Fed engages in open-market purchases in the amount of S3 billion. then monetary base will increase by S3 billion decline by S9 billion. decline by S3 billion. • increase by $9 billion. rect Question...
Question 8 The theory of liquidity preference implies that an increase in the price level shifts the Not yet answered Marked out of 2.00 Flag question Select one: a money demand curve to the right, so the interest rate decreases. b. money demand curve to the left, so the interest rate decreases. 0 C. money demand curve to the right, so the interest rate increases. 0 d. money demand curve to the left, so the interest rate increases. Question 9...
Aggregate Demand and Aggregate Supply Work It Out: Question 2 of 4 Determine whether each of the following events causes a shift of a curve or a movement along a curve in the short run Indicate which curve is involved and the direction of the change. An increase in the quantity of money by the Federal Reserve increases the quantity of money that people wish to lend lowering interest rates. This will cause a the aggregate curve to the
need all 5 answeres
If the monetary base is $1,000 billion, checkable deposits are $2,000 billion, the required reserve ratio is 10%, and excess reserves are $500 billion, then the currency in circulation are $500 billion, then 92,000 billion. A) $200 billion B) $300 billion. C) $450 billion. D) $700 billion. When the Federal Reserve wants to raise interest rates after banks have accumulated large amounts of excess reserves (i.e., when the supply curve intersects the demand curve at the...
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