Lowering the discount rate will A. decrease reserves, encourage banks to make fewer loans, and increase...
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.
Homework Answers
Answer
Option B
B. increase reserves, encourage banks to make more loans and increase the money supply
A discount rate is a rate at which the Fed lends money to the banks.
A lower discount rate increases the demand for it and banks afford to lend more. it increases lending, lending increases deposits and deposits increases reserves in the banking system, in total increases money supply.
Add Answer to:
Lowering the discount rate will
A. decrease reserves, encourage banks to make fewer loans, and
increase...
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answer these will rate after
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Thank you for your explanation 128) An increase in the discount rate bank reserves andthe money...
Thank you for your explanation
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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 the Fed increases the discount rate, then Key Bank will increase its reserves. decrease its reserves. make more loans. A contractionary or tight monetary policy stimulates borrowing. reduces borrowing. lowers interest rates. Which of the following is an inaccurate statement about the banking system? Banks borrow from households in order to lend to investors. Banks are the critical link in the flow of capital from households to investors. Competition between private banks and the central bank is what limits...
DJ. It has $559 in reserves and $9445 in loans. ? 2. The ability of banks to create money has its source in which of the following A. the 100 percent reserve requirement B. fractional-reserve banking (i.e. less than 100 percent reserve requirement) C. the ability of the government to mint as much currency as it wishes D. the banks' ability to issue currency (bank notes) of their own ? 3. Which of the following items is a liability to...
If the Fed increases the discount rate, then Key Bank will increase its reserves. decrease its reserves. make more loans. Which of the following statements is correct? Central Bank intervention is undertaken to moderate private investment behavior. Central Bank intervention depends on the political goals of its Directors. Central Bank intervention reflects its goals for inflation, unemployment and economic growth.
Answer these 3 .will rate after
When banks find themselves with excess reserves, they typically O encourage the Federal Reserve to raise the required reserve ratio. O lend out new loans. O encourage their customers to cash more checks. O sell the excess reserves to other banks. The money supply is O the total value of the public's holdings in the stock market. O the nominal value of aggregate demand. O the amount of money in circulation. O the total...
Thank you for your explanation
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