Increasing non-borrowed reserves by buying bonds in OMO causes what effect in the demand and supply of reserves? O demand to shift to the right O supply to shift to the right demand to shift to the left O supply to shift to the left
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- A decrease in the money supply and an increase in nominal aggregate output (Y) will, for sure, Select one: O a. will not impact the equilibrium interest rates O b. increase the equilibrium money holdings O c. decrease the equilibrium interest rates O d. increase the equilibrium interest rates O e. decrease the equilibrium money holdings Next page E page e to searchThe central bank sold existing government securities in an open market operation. Which of the following changes is the most likely result of this action? Select one: a. The reserve requirement decreases. O b. The nominal interest rate increases. O c. The discount rate increases O d. Bank reserves increase.in the money supply in the market for money creates excess interest rates to , money, causing everything else held constant. O A decrease; supply of; fall O An increase; demand for; fall O A decrease; demand for; rise O An increase; supply of; rise
- The graph shows an equilibrium in the market for reserves. An open market purchase would shift the supply curve to the rate to and cause the federal funds O A. right, fall O B. right, rise O C. left, rise O D. left fall Hint: Click on the graph to utilize the graph interactions feature. Select a curve to shift and move the slider in the direction of the shift to draw in the new curve. Quantity of Reserves, R Federal Funds RateConsider the following table: Interest rate % Asset demand for Money supply $460 460 220 460 220 460 220 460 The transactions demand for money in this money market would graph as a: 2 4 6 8 Transaction demand for money 10 vertical line $220 220 horizontal line money $300 280 260 240 220 Oline sloping downward and to the right single point line sloping upward and to the rightThe United States Federal Reserve is currently the money supply with the intention of keeping short-term interest rates O A. increasing, high B. increasing, low O C. decreasing, low O D. decreasing, high Reset Selection
- When the Federal Reserve sells Treasury bonds to the public, this will cause reserves in the banking system to and the money supply is likely to O decrease : decrease O increase : decrease O decrease : increase O increase : increase « Previous Next ASUS 15 RQuestion 3 In the market for reserves, suppose that the federal funds rate and discount rate are both at 7%. If the Federal Reserve Bank sells securities in the open market, then the equilibrium rate for reserves will and the amount of borrowed reserves will O not change; decrease O not change; increase O rise; increase O rise; decrease Question 4 When the Federal Reserve Bank lowers the reserve requirements for commercial banks in the economy, this causes the curve for reserves to decrease and so the curve shifts to the ----- O demand; right O demand: left O supply; right O supply; leftWhich set of actions could the central bank use to increase the money supply? Select one: O a. an open market purchase and a tax cut O b. a discount rate cut and an open market sale O c.a reduction in the required reserve ratio and an open market purchase O d. a reduction in the required reserve ratio and an open market sale
- Which of the following about saving deposits a-under M2 supply, they they are bank accounts that you cannot white a check from directly. generally moneyl to be kept asided. you can easily withdraw money cash from these aacounts at an automatic teller machine or back d- included in M1 money supply these are the monies held in checking accounts. they are called demand deposits or chekable deposits because the bank must give the deposit holder his money on demand when a check is written or a debit card is used c- included in M1 money supply therefore, very lliquid these are coins and bills that vcirvulate in an economy that are NOT held by the US treasury Federal reserve bank, or in any bank vaults so the cash you havae in your wallet pocket right now d- under M2 money sypplly funds that you invest in where the deposits of many investors are pooled together and invested in a safe way such as short term goverment bods.Households and businesses often hold some of their wealth as non-interest earning money balances because O a. Money balances always pay lower rates of return than the non-money assets O b. The opportunity cost of holding money balances is lower than that of other assets Money balances provide convenience and lower risk than many other assets O C. O d. Money balances offer a better protection against rising prices than do many other assetsIf a bank uses $100 of excess reserves to make a new loan when the reserve ratio is 25 percent, what happens to the money supply in the very short term? O a. It decreases by $100. O b. It increases by $25. O C. It decreases by $25. O d. It increases by $100. Show Transcribed Text Suppose a bank has $200,000 in deposits and $150,000 in loans. What is its reserve ratio? O a. 1 percent O b. 5 percent O C. 10 percent O d. 25 percent Show Transcribed Text Which list ranks the Bank of Canada's monetary policy tools from most to least frequently used? O a. bank rate changes; open-market transactions; reserve requirement changes O b. bank rate changes; reserve requirement changes; open-market transactions O c. open-market transactions; bank rate changes; reserve requirement changes O d. open-market transactions; reserve requirement changes; bank rate changes