Which of the following will most likely to happen if Federal Reserve Bank decreases the money supply?
I and II only
I, II, and III
I only
II and III only
II and III only
I is incorrect- Interest rates increase due to lesser supply of money
II is correct- Due to higher interest rates, demand for money decreases
II is correct: Due to lesser demand for money and thereby goods, the prices of the goods decline.
Which of the following will most likely to happen if Federal Reserve Bank decreases the money...
12. Which of the following is most likely to occurif the Federal Reserve engages in open market operations to reduce inflation? (A) A decrease in interest rates B) A decrease in reserves in the banking system C) A decrease in the govemment deficit D) An increase in the money supply increase in exports pon
15. Which of the following items is assets of a bank A. loans B. checking account deposits C, saving account deposits D. money borrowed from Federal Reserve 16. In an open economy, if a country has a trade surplus, which is NOT correct-? A. Exports > Imports. C. Saving > Investment D. Net capital outflow> 0 17. Inflation will be reflected as the directly proportional change of A. Total money supply increase B. Nominal wage growth, but not nominal interest...
why choose d?
28. Recently, the Federal Reserve is considering raising the interest rate for the first time since 2006. Which of the following would result in the short run if the interest rate is increased? . A lower inflation rate I A decrease in the money supply I A higher unemployment rate a. I and b. Il and III c. Iand IlI d. I, II, and ill
28. Recently, the Federal Reserve is considering raising the interest rate for...
When the Federal Reserve decreases the growth of the money supply, the income afect causes the interest rate to while the liquidity effect drives the interest rate Continuing on the same tran thought when the Fed decreases the growth rate of the money supply the price level ofect drives the interest rate while the expected inflation rate pushes the interest rate Suppose there is an increase in the growth rate of the money supply the liquidity effect is smaller than...
If the Federal Reserve increases the reserve requirement, what will happen to the Money Supply in the banking system? a. Increase b. Decrease c. Remain the same
QUESTION 1 Commercial bank reserves held at a Federal Reserve Bank are a liability of the commercial bank and an asset of the Federal Reserve. True False QUESTION 2 During normal economic times, the Federal Reserve has primarily influenced overall financial conditions by adjusting the federal funds rate. The Fed Funds rate is the rate the U.S. Government charges banks for short term credit. True False QUESTION 3 Everything else held constant, a decrease in holdings of excess reserves will...
Which of the following statements is positive? Group of answer choices When the Federal Reserve increases the money supply, interest rates decrease. Large budget deficits should be avoided. A tax cut that benefits low-income households is acceptable. Higher taxes are needed to support education. The standard of living in an economy is best measured by: Group of answer choices output per person. average labor productivity. total output. the inflation rate. If average labor productivity increases while population and the number...
can
you answer question 15 & 16
QUESTION 15 Suppose that the Federal Reserve believes the economy is growing too fast and engages in contractionary monetary policy. What happens to the money supply and interest rates in the money market? A. The money supply increases and interest rates fall. B. The money supply increases and interest rates rise. C. The money supply decreases and interest rates fall. D. The money supply decreases and interest rates rise. QUESTION 16 Suppose the...
In 2018, the Federal Reserve, the Central Bank for the U.S., raised the Federal Funds Rate three times from 1.0% in 2017 to 2.20% in November of 2018. The Fed is likely to continue increasing interest rates in 2019 and 2020. (1) What effect is a higher Federal Funds Rate likely to have on the number of loans banks make, on consumption and on investment? Explain why. (2) Why is the Fed raising interest rates now? Explain how the current...
11 The Federal Reserve Bank was created in 1913. The Federal Reserve Bank was put in charge of U.S. monetary policy. They are responsible to regulate banks, manage the money supply, and influence the direction of interest rates, 8 02:13:42 True or False Skipped False True