Suppose the reserve ratio is 10%. If the Fed wants to derease the money supply by $10 million, what should it do in the bond market?

Suppose all banks have zero excess reserves. The Fed buys bonds for $1 million and a bond dealer deposits the check in his or her bank. The required reserve ratio is 8 percent. The bank loans out the maximum it is allowed to a local business. The business writes a check for the full amount for supplies, which is then deposited in another bank. The largest loan the second bank can make is: The largest loan the second bank can make is $. (Round your answer to the nearest dollar.)

28) If the required reserve ratio is 10% and the Federal Reserve purchases $50 million in treasury bonds on the open market, how could the money supply be impacted? a) Increase by a maximum amount of $500 million b) Increase by a maximum amount of $50 million c) Decrease by a maximum amount of $500 million d) Decrease by a maximum amount of $50 million 29) What is the most likely outcome of expansionary monetary policy? a) A decrease in the quantity of money, higher interest rates, and increased aggregate demand. b) An increase in the quantity of money, higher interest rates, and increased aggregate demand. c) A decrease in the quantity of money, lower interest rates, and decreased aggregate demand.. d) An increase in the quantity of money, lower interest rates, and increased aggregate demand.

Following the Great Recession, the Federal Reserve adopted a restrictive reserve policy.   true  false

You find a $1,000 bill hidden beneath the floorboards in your house and decide to deposit it in your checking account. On the same day, the Fed decides to buy $1,000 in government securities from your bank. Assuming a 10 percent reserve requirement, which of these actions creates more money in the economy?

How could the approval of international banking facilities (IBFs) by the Fed in 1981 have reduced employment in the banking industry in Europe?

An open market sale of bonds by the Central Bank shifts the demand for reserves to the left.  Select one: True False

Explain why the Reserve Supply is perfectly elastic at Discount Window Rate.

The Fed can put more reserves into the banking system by:   Group of answer choices Purchasing government securities Increasing the discount rate Selling government securities Lending to nonbank

Suppose that the Fed want to lower the inflation rate. Discuss what policy instruments the Fed can use besides raising interest on reserves.