Answered: Which one of these is not a tool used…

Which one of these is not a tool used in monetary policies? a. Open market operations b. Cash reserve ratio c. Tax rates d. Bank rates

Economics (MindTap Course List)

13th Edition

ISBN:9781337617383

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter12: Money, Banking And The Financial System

Section: Chapter Questions

Problem 4QP

See similar textbooks

Related questions

Q: The Federal Reserve measures the money supply using which of the following? A) Savings Accounts B)…

A: Money supply refers to all the currency and other liquid instruments in a country’s economy at a…

Q: a) According to Monetarism, when does an increase in money supply change both Real GDP and price…

A: a) A contractionary monetary policy reduces an economy's money supply. A reduction in the money…

Q: M2 definition of the Money Supply includes which which of the following? Question 30 options:…

A: Functions of money . A store of value . a unit of account . a medium of exchange

Q: Discuss with example of monetary policy and how it established federal reserve structure of country?

A: Solution: Monetary Policy: It is a policy which is pursued by the central bank to administer,…

Q: Suppose the banks in an economy have a reserve-deposit ratio of 10 percent and the currencydeposit…

A: Let the initial monetary base is H0 Central bank increase the monetary base by $400, then a new…

Q: What is Open Market Operations (OMOs)? How Central Bank used OMOs to control the money supply?

A: Central Bank has th rights to influence the market condition by making changes in the money supply.…

Q: Q19 The money supply is controlled by the Select one: a. South African Reserve Bank b. President of…

A: Money supply is the amount of money which is circulating in the economy. It is very important for…

Q: The case talked about money, what type(s) of money islare mentioncd in the case? Bone money O…

A: Money is a resource or asset that is accepted and used as an exchange medium to buy commodities and…

Q: If the ratio of currency to deposits (cr ) increases , while the ratio of reserves to deposits ( rr…

A: If the ratio of currency to deposits (cr ) increases , while the ratio of reserves to deposits ( rr…

Q: In a model of the money supply, if the monetary base is 1000, the reserve-deposit ratio is 0.1 and…

A: here we can choose the correct option and find the money supply which are as follow

Q: Ali deposits RM500 in Bank A. The requirement reserve ratio set by the Central Bank is 5 percent.…

A: Required reserve ratio = 5% = 0.05 ------------------- Money multiplier = (1 / required reserve…

Q: If the Fed wants to decrease the quantity of money, what actions does it take? What is the…

A: 1. When the Fed wants to decrease the quantity of money in the economy, it makes the open market…

Q: What is fiat money? What is commodity money? Which kind do we use?

A: Since you have asked multiple question, we will solve the first question for you. If you want any…

Q: Which of the following would be classified as monetary policy? O The federal government cuts taxes…

A: A monetary policy is the policy used by the central bank to change the money supply in the economy…

Q: What will be the money supply, if the central bank purchases a government bond from an individual…

A: Economics as a subject deals with the allocation of scarce resources among humans with unlimited…

Q: In the United States today, what “backs” our money (gives it value)? A. Gold in the Department of…

A: Money is the medium of exchange that we used to exchange goods and services.

Q: Which of these actions shows an expansionary monetary policy? d Decrease of the minimum required…

A: Monetary policy refers to change in supply of money in the economy.

Q: If a central bank buys government securities from the private sector-money markets, leading to an…

A: Since you have posted a question with multiple subparts, we will solve the first three complete…

Q: reference to countries where there have been very little, or no history of bank failures are deposit…

A: A bank failure occurs when a federal or state regulator closes an insolvent bank. National banks are…

Q: n a contractionary monetary policy, the Central Bank decreases money supply by _____. a. Selling…

A: Contractionary monetary policy is reducing money supply and control inflation.

Q: The central bank has most control over a. Monetary base b. M1 c. M2

A: Meaning of Financial Assets: The term financial assets refer to the situation, under which these…

Q: The economy of Moneyland contains 5000 $1 bills. a. If people hold all money as currency, what is…

A: “Since you have posted a question with multiple sub-parts, we will solve first three subparts for…

Q: When monetary authorities are deemed as "conservative," they are more likely to implement policies…

A: Monetary policy is the actions by the Central bank that increase or decrease liquidity. When…

Q: What are the tools the reserve bank is using in Australia to run a monetary policy?

A: There are four primary tools for the central bank of any country to have control in the money…

Q: How are M1 and M2 equations related to reserve market (interbank)? Let’s say, central bank applies…

A: Money supply refers to the total money stock which is in circulation within the general public at a…

Q: Assume that individuals do not hold currency. If the reserve ratio is equal to 5 cent, then if the…

A: Required reserve ratio is the minimum requirement of reserve that banks are needed to hold which…

Q: The central bank in Jamica decides to pursue an expansionary monetary policy. (i) Identify one…

A: “Since you have posted multiple questions, we will provide the solution only to the first question…

Q: Who are the members of the Monetary Board?Please describe

A: The monetary board conducts monetary policies and regulates the money supply and level of inflation…

Q: Assume that the banking system has total reserves of $200 billion. Additionally, assume that the…

A: Total reserve = $200 billion Required reserve = 25%

Q: Prime Interest Rate Rises Business Investment Falls M1 Rises at Faster Rate M1 Rises More Slowly GDP…

A: Sell Government Bonds then When the government sells bonds, then it is the contraction policy where…

Q: An economy has a reserve ratio equals to 12%. The society is holding 10% of the deposit in the form…

A: The reserve ratio is part of the required reserves that commercial banks must hold rather than…

Q: Which of the following will not increase the money supply? 1, The RBA purchasing bonds from private…

A: The money supply is the monetary policy which is controlled by the central bank. The central bank…

Q: (Monetary Control) Suppose the money supply is currently $500 billion and the Fed wishes to increase…

A: A. Money supply refers to the total sum of money available in the economy for sale and purchase of…

Q: Economics In Kentucky, the quantity of money is $160 billion, the current drain ratio is 25% of…

A: Given, Quantity of money in Kentuckty = $160 billion Current drain ratio (C/D)= 25% = 0.25 Reserve…

Q: What kind of monetary policy rule did Milton Friedman advocate? Select one: a. Long-run economic…

A: According to Milton Friedman, the money supply rate should be equal to the real GDP growth rate.

Q: Which of the following is an example of a contractionary monetary policy? a. a decrease in the…

A: Contractionary monetary policy refers to decrease in money supply.

Q: Which from the following variables is most likely to be an intermediate target of monetary policy?…

A: Which from the following variables is most likely to be an intermediate target of monetary policy?…

Q: Which of the following is NOT a policy tool of the Central Bank? * a. open market operations b. the…

A: A national bank, central bank, or money related authority is a foundation that deals with the cash…

Q: What are the two goals of monetary policy? a. Maximum employment and low and stable inflation b.…

A: In an economy, fiscal policy and Monetary policies are used is different situation as fiscal policy…

Q: The economy of Moneyland contains 5000 $1 bills. a. If people hold equal amounts of currency and…

A: a)5000

Q: Central banks can use monetary policy to O a) reduce interest rates. O b) increase government…

A: Monetary policy refers to the policy which is adopted by the central bank of the country to…

Q: s the private banking system create money (use M1 as the definition of money supply)? (Private banks…

A: M1 = cash or coins held by public + demand or checkable deposits + traveller checks Private banking…

Q: In Canada during 2020, M1+ grew by 28%, its highest growth rate since October 1985. a) What is…

A: Money is any object that is widely accepted in a given country or socio-economic context as payment…

Q: Tightening monetary policy causes interest rates to none of the other answers are correct. O fall;…

A: The policy that the central bank provides for the economy as a whole are referred to as monetary…

Q: The central bank buys $10,000 worth of bonds in the open market from Elaine, who deposits the…

A: Central bank: It means an apex financial institution of the country. Liabilities are the deposit…

Concept explainers

Required Reserve and Excess Reserve Analysis

A required reserve is an amount of cash that banks must keep with themselves, which is certain percentage of the deposits made by their customers. Required reserve is a percentage of the bank's deposits that the respective bank must have on each overnight. The percentage rate is set and determined by the nation’s central bank. It is important to have such funds accumulated to meet its uncertain obligations, sudden liabilities and withdrawals. Required reserve is also known as reserve ratio. Reserve ratio is an important tool to control the money supply.

Question

Which one of these is not a tool used in monetary policies? a. Open market operations b. Cash reserve ratio c. Tax rates d. Bank rates

Definition Definition Policy implemented by the central bank of a country (such as the Federal Reserve in the United States) to achieve certain macroeconomic objectives. Monetary policy is a supply-side macroeconomic policy that supervises the growth rate and money supply in the economy.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

What is monetary policy and what entities make it?
The central bank announces that it expects inflation to be relatively low while unemployment rises in the following months. What would be an expected monetary policy action as a result of this forecast? a. Increase government spending. b. Decrease the discount rate. c. Increase the reserve ration. d. Sell bonds on the open market. e. Decrease marginal income tax rates.
Discuss what monetary policy is. Discuss different instruments of monetary policy.
Which of the following is NOT a tool of monetary policy? Select one: a. Discount rate b. Reserve requirement ratio c. Moral Suasion d. Printing more money
Q. What are tools of Monetary Policy? What should be monetary policy in developing countries like Pakistan?
What is monetary policy?
Who is in charge of the monetary policy?
What are the monetary policy goals and how to achieve them using Monetary tools?
Investors in Bahrain are complaining that there is not enough credit that are being made available for them. Interest rates are low but still there are not many lenders of money who are willing to lend their money. What appropriate monetary policies can be implemented in this case? a.Decrease income taxes and increase government spending b.Increase cash reserve ratio and increase interest rates a little to encourage lenders c.Decrease cash reserve ratio and increase interest rates a little to encourage lenders d.Decrease cash reserve ratio and decrease interest rates a little to encourage lenders
why should monetary policy be used ?
Explain how does monetary policy affect the economy and business activities?
You are the new Governor of State Bank of Pakistan after Reza Baqir. For each of the situations listed below, decide if you would use Easy-Monetary policy or Tight-Monetary policy. Explain each scenario within 150 words. 1. We are in a recession. Factory orders are down, and the economy appears to be slumping. 2. Unemployment is low and prices are rising steadily. 3. Unemployment rates are pushing 11 percent while the CPI has fallen from 8 percent to 2 percent growth. 4.We are in a recession but are experiencing high inflation. 5. The money supply appears to be tight, and prices are on the rise.