The Federal Reserve System changes the money supply by Multiple Choice O O providing forward guidance about how it intends to conduct monetary policy. changing the number of banks in the system. controlling the production of coins at the U.S. Mint. restricting the issuance of Federal Reserve Notes because paper money is the largest portion of the money supply.
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- A purchase of U.S. government securities by the Fed causes A. a multiple contraction of the money supply because deposits fall by more than the amount of the securities purchased. B. a contraction of the money supply equal to the amount of the securities because all other transactions occur within the banking system. C. an expansion of the money supply equal to the amount of the securities because all other transactions occur within the banking system. D. a multiple expansion of the money supply because the required reserve ratio is less than oneWhat "backs" the money supply of the United States? Multiple Choice O the fact that currency is issued by the Federal Reserve System O the amount of gold the U.S. government has on deposit at its banks O the fact that the intrinsic value of coins in circulation is greater than their face value the U.S. government's ability to keep the value of money relatively stableWhy can’t the Fed control the money supplyperfectly?
- U Search thi Aplia Homework: Money and the Financial System Attempts Keep the Highest/2 Tools 4. The structure of the Federal Reserve Which of the following are objectives that the Federal Reserve tries to achieve when setting monetary policy? Check all that apply. ips O Price stability ps OEconomic growth O Zero unemployment O Interest rate stability O Zero inflation Which of the following contributes to making the Federal Reserve an "independent" policymaking body? O There are 12 different Federal Reserve banks. O Its role is written into the U.S. Constitution. O Members of the Board of Governors are appointed for 14-year, nonrenewable terms. Grade It Now Save & Continue Continue without saving to search DELLIf a society chooses fiat money as its money form, it __________.Group of answer choices A. will need to make sure the currency is convertible into gold B. must make sure there is an illiquid money supply C. should estimate any central bank D. must be particularly vigilant about controlling the quantity of moneyImagine that the federal funds rate was above the level the Federal Reserve had targeted. To move the rate back towards itť's target the Federal Reserve could O sell bonds. This selling would reduce the money supply. O buy bonds. This buying would increase the money supply. O sell bonds. This selling would increase the money supply O buy bonds. This buying would reduce the money supply.
- Explain whether each of the following eventsincreases or decreases the money supply.a. The Fed buys bonds in open-market operations.b. The Fed reduces the reserve requirement.c. The Fed increases the interest rate it pays onreserves.d. Citibank repays a loan it had previously takenfrom the Fed.e. After a rash of pickpocketing, people decide tohold less currency.f. Fearful of bank runs, bankers decide to hold moreexcess reserves.g. The FOMC increases its target for the federalfunds rate.In the economy of Nocoin the banks have deposits of $300 billion. Their reserves are $36 billion, two thirds of which is in deposits with the central bank. Households and firms hold $24 billion in bank notes (dollar bills). There are no coins! Calculate the monetary base and the quantity of money. Calculate the banks' desired reserve ratio and the currency drain ratio (as percentages). The monetary base is $ billion. The quantity of money is $ billion. The banks' desired reserve ratio is percent. The currency drain ratio is percentMoney: 1.Illustrate the tools of money supply
- The velocity of money in the small Republic of Sloagia is always the same. Last year, the money supply was $ 6 billion and real GDP was $ 20 billion. This year, the money supply increased by 4 percent, real GDP by 5.4 percent, and nominal GDP is $ 19 billion. Calculate the velocity of money Number The price level last year, Number The Price level this year Number The inflation rate. NumberThe Monetary System – Work It Out: Question 1 In the nation of Orcam, people hold $10000 of currency and $50000 of demand deposits in the only bank, Orcbank. The reserve-deposit ratio is 0.1. Round answers to two places after the decimal when necessary. a. Calculate the money supply, the money multiplier, and the monetary base. money supply: $ 60000 5.50 money multiplier: Incorrect 5.50 monetary base: $ Incorrectin the economy of Nocoin the banks have deposits of $400 bilion Their reserves are $80 billion, two thirds of which is in deposits with the central bank Households and frms hold $20 billion in banknotes (dollar bills). There are no coins! Calculate the banks' desired reserve ratio and the currency drain ratio (as percentages) The banks' desired reserve ratio ispercent The currency drain ratio is percent