The following graph represents the money market for some hypothetical economy. This economy is similar to the United States in the sense that it ha a central bank called the Fed, but a major difference is that this economy is closed (and therefore does not have any interaction with other world economies). The money market is currently in equilibrium at an interest rate of 4% and a quantity of money equal to $0.4 trillion, designated on the graph by the grey star symbol. INTEREST RATE (Percent) 60 5.5 5.0 45 3.5 3.0 25 2.0 Money Demand 0 0.1 0.2 Money Supply 03 0.4 05 06 0.7 MONEY (Trillions of dollars) 0.8 4 New MS Curve .+ New Equilibrium ? image 1 Suppose the Fed announces that it is lowering its target interest rate by 75 basis points, or 0.75 percentage points. To do this, the Fed will use open- market operations to the money by the public.

Hey, I need help with the following macro question. Thank you in advance! Imagine that the chair of the Federal Reserve announced that, as of the following day, all currency in circulation in the United States would be worth 10 times its face denomination. For example, a $10 bill would be worth $100; a $100 bill would be worth $1,000; and so forth. Furthermore, the balances in all checking and savings accounts would be multiplied by 10. So, for example, if you had $500 in your checking account, as of the following day your balance would be $5,000. Would you actually be 10 times better off on the day the announcement took effect? Why or why not?

Consider an economy described by the following equations: Y = C + I + G Y = 6100 G = 1100 T = 1100 C = 1000 + .75(Y - T) I = 1100 - 60r in this economy compute private savings, public savings and national savings Find the equilibrium interest rate Now suppose that G rises to 1200. Compute private savings, public savings and national savings. Find the new equilibrium interest rate.

Could you add more information regarding the below statement? "The Federal Reserve System plays a massive role in not only the economy of the united states but alos in the global economy. The US dollar is one of the most popular and well recognized forms of currency all around the world, making it the basis for many financial transactions and trades. This popularity and standardization in regards to the dollar makes it one of if not the most important currency in the world, whose value has implications on nearly every aspect of trade, consumers, and even other countries wellbeing. Because of this, the fed, who has the ability to influence the value of the dollar and the economy, is likely the most important financial institution of the world, because of it's ability to severely impact both positively and negatively the united states economy and the world economy. With the recent inflation, I do think that the fed should take some action to mitigate the risk of any catastrophic…

Suppose the Federal Reserve wants to fix the U.S. exchange rate with the yen at $0.008 per yen. If the equilibrium market exchange rate were significantly lower at $0.007 per yen, what would the Fed need to do to maintain the fixed rate of $0.008 per yen? What would be the effect of these actions on the money supply in the U.S.? Explain.

Consider the following closed economy: C = 30 + 0.87 x YD. 1= 2400 G = 2000 TR = 30 T = 0,40 x Y If there is a 80 increase in autonomous government expenditures, what is the change in government savings (assuming no change in the price level)? © Do not write the dollar ($) sign, and use a minus (-) in front of a decrease. Round your answer at two (2) decimals if necessary.

#27 You saved $900 in currency in your piggy bank to purchase a new iPhone. The $900 you kept in your piggy bank illustrates money’s function as a _______. The iPhone’s price is posted as $900. The $900 price illustrates money’s function as a _____. You use the $900 to purchase the iPhone. This transaction illustrates money’s function as a ______.   a medium of exchange, unit of account, store of value b medium of exchange, store of value, unit of account c store of value, medium of exchange, unit of account d store of value, unit of account, medium of exchange

Let’s assume that the nominal Gross Domestic Product, GDP, of a hypothetical country is $45,000 and that the velocity of money of this country is 5. This implies that the money supply, in this country, is:

3. Changes in the money supply The following graph represents the money market for some hypothetical economy. This economy is similar to the United States in the sense that it has a central bank called the Fed, but a major difference is that this economy is closed (and therefore does not have any interaction with other world economies). The money market is currently in equilibrium at an interest rate of 2.5% and a quantity of money equal to $0.4 trillion, designated on the graph by the grey star symbol. INTEREST RATE (Percent) 4.5 4.0 6 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0 Money Demand + 0.1 Money Supply 0.3 0.5 0.6 MONEY (Trillions of dollars) 0.2 0.7 0.8 New MS Curve New Equilibrium ? Suppose the Fed announces that it is lowering its target interest rate by 75 basis points, or 0.75 percentage points. To do this, the Fed will use open- market operations to the money by the public. Use the green line (triangle symbol) on the previous graph to illustrate the effects of this policy by placing…

Suppose a hypothetical open economy uses the U.S. dollar as currency. The table below presents data describing the relationship between different real interest rates and this economy's levels of national saving, domestic investment, and net capital outflow. Assume that the economy is currently operating under a balanced government budget. Real Interest Rate (Percent) 7 REAL INTEREST RATE 10 2 0 6 0 5 4 3 2 National Saving (Billions of dollars) 45 40 20 35 30 25 20 Given the information in the table above, use the blue points (circle symbol) to plot the demand for loanable funds. Next, use the orange points (square symbol) to plot the supply of loanable funds. Finally, use the black point (cross symbol) to indicate the equilibrium in this market. Market for Loanable Funds 40 60 QUANTITY OF LOANABLE FUNDS 80 Domestic Investment (Billions of dollars) 30 35 40 45 50 100 55 。 Net Capital Outflow (Billions of dollars) -15 -10 -5 0 Demand Supply + 5 Equilibrium 10