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Fill in the blank with increases or decreases The open market sale of securities by the...
10. An open market sale of Treasury securities ___________ the price of Treasury securities, thereby __________ the yield on Treasury securities. This sale of Treasury securities __________ the monetary base and __________ the money supply. a. Decreases, increases, decreases, decreases b. Increases, decreases, increases, decreases c. Increases, decreases, increases, increases d. Decreases, increases, increases, decreases
4- When the Fed conducts open-market sales, a. it sells Treasury securities, which decreases the money supply. b. it lends money to member banks, which decreases the money supply. c. it borrows from member banks, which increases the money supply. d. it sells Treasury securities, which increases the money supply. 5- When the government levies a $100 million tax on people's income and puts the $100 million back into the economy in the form of a spending program such as new...
An open market purchase A. decreases the price of Treasury securities and increases their yield. B. decreases the price of Treasury securities and also decreases their yield. C. increases the price of Treasury securities and decreases their yield. D. increases the price of Treasury securities and also increases their yield.
An open market sale by the Fed will increase currency held by the public or vault cash. increase bank reserves. increase the money supply. reduce the money supply.
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
An open market purchase by the Federal Open Market Committee O decreases the supply of money. O increases the supply of money. O decreases the demand for mone increases the demand for money
5) The Fed makes an open market sale of $500 in bonds to a bank for reserves. The reserve requirement is 10%. Show the changes on the balances sheets of the Fed and the bank. What is the change in the monetary base? What is the change in the money supply? You can use the simple formula for the money multiplier.
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...
Which of the following would reduce the money supply? Multiple Choice An open market sale of government bonds by the Fed. Commercial banks use excess reserves to buy government bonds from the public. Taasisi An open market purchase of government bonds by the Fed. A check clears from Bank A to Bank B.
The Fed conducts an open market sale of bonds. $50 million and the reserve ratio is 20% and after the sale. a. Does the money supply INCREASE or DECREASE? (circle) b. How much does the money supply change? 9. Suppose a country has a 100% reserve requirement for all banks. a. How much does the money supply change from a deposit of $100 by a housen b. What is the role of banks in moving funds from depositors to borrowers?...