Federal Funds Rate (%) Op Q11 Sp S Sa D On Quantity of Reserves If the Fed wants the federal funds rate to be at if1, what quantity of reserves do they need to make available to banks? A) Qf1 B) Qf2 C) Qf3 D) It cannot be determined with the information given.

AB ans

1 Which of the following is a component of money?  a) bonds  b) saving  c) income  d) stocks  e) none of the above

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You are the bank's liquidity manager. If the liquidation cost of highly non-liquid assets decreases, the risk of illiquidity [A] and the cost of illiquidity [B]. Therefore, it you can [C] the ESF buffer. As a result, your bank will provide [D] liquidity transformation for society.   C and D are   increase, the same   decrease, the same   increase, less   decrease, more

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A bank that has assets of $150 billion and a net worth of $30 billion must have Multiple Choice О liabilities of $30 billion. O liabilities of $120 billion. О excess reserves of $120 billion. excess reserves of $30 billion.

Prudent commertial bank is trying to estimate the liquidity requirements today (last day of February) for the month of March. Assume legal reserve requirements are s%. Currently the bank's total deposits are sooo million and are expected to grow by 8 percent during the month of March. The bank has estimated that 20% of the total deposits are hot money deposits, 30% are vulnerable deposits and the rest are stable (core) deposits. The liquidity manager would like to keep a liquidity reserve of 8o% for hot money, 35% liquidity reserve for vulnerable deposits and 10% Tiquidity reserve for core deposits. Currently the bank's total loans are at 4000 million. The bank expects a 400 million reduction in the level of loans during March

The central bank buys worth of bonds in the open market from Joe, who deposits the proceedsin his checking account at Bank. The required reserve ratio is .(a) What is the amount by which Bank’s liabilities have changed? Explain.(b) Calculate the change in required reserves for Bank. Show your work.(c) What is the dollar value of the maximum amount of new loans Bank can initially make as aresult of Joe’s deposit? Explain.(d) Based on the central bank’s open-market purchase of bonds, calculate the maximum amount bywhich the money supply can change throughout the banking system. Show your work.(e) How will the change in the money supply in part (d) affect aggregate demand and the price level inthe short run? Explain