An open-market purchase of securities by the Bank of England results in ________ in reserves and ________ in the supply of money. A) an increase; an increase B) a decrease; an increase C) an increase; a decrease D) a decrease; a decrease
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Can you please answer question 42, please? No explanation needed
An open-market purchase of securities by the Bank of England results in ________ in reserves and ________ in the supply of money.
- A) an increase; an increase B) a decrease; an increase
- C) an increase; a decrease D) a decrease; a decrease
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- (c) Use the following table to explain the effect of monetary policy on money supply in different scenarios. Copy the table in your answer booklet. Change in Money Supply Multiplier (Increase or decrease) and by how much? Money Required Reserve Action You deposit £1000 in a 10% bank CB buys £80,000 bonds 50% CB sells £20,000 bonds 20%A) Explain whether each of the following events increases or decreases the money supply. 1) The State Bank of Pakistan sells bonds in open-market operations. 2) The State Bank of Pakistan increases the reserve requirement. 3) The State Bank of Pakistan reduces the interest rate it pays on reserves. 4) MCB Bank repays a loan it had previously taken from the State Bank of Pakistan. 5) After a rash of pickpocketing, people decide to hold less currency. 6) Fearful of bank runs, bankers decide to hold more excess reserves.The First National Bank has $100million in chequable deposits. The desired reserve ratio is 6%. (i) Calculate the Bank's reserves. Round your answer to two decimal places. (ii) The Bank desires to invest $30million in Treasury bills. The Treasury bills are currently trading at $4986.7 (including brokerage fee). How many Treasury bills does the Bank purchase? Round your answer to the nearest whole number. (iii) The Bank makes commercial loans of $25millions and lends $39.3million in mortgages. Calculate the amount of bank capital. (iv) Complete the balance sheet of the Bank. (v) Assume that there is a shortfall of reserves because depositors withdraw $5million from the Bank. Show the new balance sheet of the Bank. What can the Bank do to eliminate the shortfall of reserves?
- (a) Given that: Total deposit as of August 2021 in Indonesia = USD 621.2 Billion Total currency in circulation as of August 2021 = USD 93.2 Billion Reserve required as of August 2021 = 2% Total Excess Reserve as of August 2021 = USD 53.2 million From the above information: (i) Calculate the monetary base (ii) Calculate the money multiplier. What will be the total money supply? (iii) Suppose that the Indonesia Central Bank targeted money supply to grow by 3% next year. Suggest any ONE (1) way to achieved the targeted money supply.Question 1 I deposited Rs. 3 million of my money in a Habib Bank Limited, State Bank of Pakistan: Required rate of reserve ratio (RRR): Weekly Average Demand Liability was set as 10.0 % in June 2020. You are required to calculate the change in the money supply in the economy. If RRR decreased to 5% in August 2020, what will happen with the same deposit of Rs. 3 million. You are also required to compare and discuss it in few lines (150 words)64. What does it mean when a currency is "fractionally backed"? Banks have many more claims outstanding against them than they have reserves available to pay those claims. The currency is partially backed by the nation's supply of gold. Banks maintain a fixed fraction of their outstanding deposits as cash deposits with the central bank. All paper currency is convertible to gold. A bank's currency is fractionally backed by its supply of gold.
- 1) Explain the functions of Money and the role of the Federal Reserve in regulating the economy through and monitory policy.If a local bank decides to convert some of its U.S. Treasury securities into cash, which it will hold in its vault, reserves will ________, liabilities will ________, and owner’s equity will ________.Economics According to the Simple Deposit creation model if the Fed conducts an open market sale of $400 million then the money supply will _______________ by __________________; assuming that the required reserve ratio is 10%. Fill in the statement and show the following word: a) Illustrate impact on T-accounts of the Banking System and the FED b) State the exact change in R and MB [give # and directional change: rise of fall] c) Calculate the impact on Money Supply using the simple model (show work). [obtain # and state the directional change: rise of fall]