3. What are the effects of the following events on the monetary base? i. The Treasury writes checks to Social Security recipients for $800 million. Monetary base would increase ii. The Federal Reserve buys a new fleet of cars for $5 million. No impact because it is a consumption of goods iii. The Federal Reserve sells $5 billion of Treasury bills in the open market. Money supply would decrease by $5 billion iv. The Federal Reserve sells $700 million of its German bonds for euros.

3. What are the effects of the following events on the monetary base? i. The Treasury writes checks to Social Security recipients for $800 million. Monetary base would increase ii. The Federal Reserve buys a new fleet of cars for $5 million. No impact because it is a consumption of goods iii. The Federal Reserve sells $5 billion of Treasury bills in the open market. Money supply would decrease by $5 billion iv. The Federal Reserve sells $700 million of its German bonds for euros.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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TOPIC: Equilibrium in the money market NOTE: Everything you need will be in the picture. Thank you
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None
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