Answered: the quantity of money supplied exceeds…

Business

Economics

the quantity of money supplied exceeds the quantity of money demanded then what can you say about the current rate of

Economics:

10th Edition

ISBN:9781285859460

Author:BOYES, William

Publisher:BOYES, William

Chapter13: Monetary Policy

Section: Chapter Questions

Problem 12E

See similar textbooks

Related questions

Q: The table below shows the amount of savings and borrowing in a market for loans to purchase homes,…

A: At the equilibrium interest rate quantity demanded is equal to quantity supplied. It is clear from…

Q: Is everybody worse off when interest rates rise?

A: The interest rate is the rate charged by the lender on the asset lend by them. The asset lend can be…

Q: Historically, usury laws that put below-equilibrium ceilings on interest rates have been used by…

A: A price ceiling is a type of price control that creates a barrier to the maximum price that can be…

Q: Who benefits when the Bank of Canada lowers interest rates? Who benefits when interest rates rise?…

A: Firms ( who are borrowing ) and consumers benefit when the Bank of Canada lowers interest rates.…

Q: In the mid 1800's, grain sellers in Chicago would deliver their grain to warehouses and receive a…

A: The currency that has been established as money, has no use or intrinsic value and is made legal…

Q: Let's say that you have put $1,000 in your savings account at a local financial institution, and an…

A: 1.The employee is correct, of course.The reason for this is that the money you have deposited in…

Q: Use the concept of opportunity cost to explain why velocity is higher at higher interest rates

A: Potential profits foregone when one alternative is chosen over another are referred to as…

Q: What effect will a sudden increase in the volatility of gold prices have on interest rates? Explain…

A: The rate of interest is that the amount a loaner charges a recipient and may be a share of the…

Q: Consider the scenario where you are the Chairperson of the Federal Reserve Bank. The US economy is…

A: inflation is the situation where general average price level increases over period of time .…

Q: Which situation leads to the distinction between nominal and effective interest?

A: If the compounding is more frequent than once per year, then the nominal and effective interest rate…

Q: Stephanie deposits $500,000 in Bank of America. Assuming that banks lend out everything that they…

A: Total Deposit = $500,000Required Eeserve = 14%Intrest rate = 2%

Q: As a lender/depositor, how would you compare time to demand deposits? Demand deposits are more…

A: Meaning of Demand Deposit: The term demand deposits refer to the situation under which an…

Q: Complete the following table:

A: Demand and Supply is defined as the relationship between the quantity of a good or service which a…

Q: what is the effects of this to firm value?decrease or increase? An expected increase in inflation…

A: A general rise in the level of prices related to the goods available, which results in continuous…

Q: make many small loans. d. Through the checking accounts they facilitate, banks

A: A bank is a financial institution being licensed in order to receive deposits and also make loans.…

Q: At the Great Recession of 2008, why would Wall Street buy mortgages of people who had really bad…

A: Wall Street buy mortgages of those people who really have a bad credit rating and no down payment…

Q: The inadequacy of money supply circulating or available in the financial system makes the trading of…

A: International trade agreements govern the exchange of goods and services between two or more…

Q: How can market forces of supply and demand affect interest rates and the economy

A: The demand and supply affect interest rates in the money market. The money market is the market that…

Q: Distinguish between Market and Inflation-Free Interest Rates?

A: The Market interest Rate, also called the nominal interest rate (i) is the rate which is not…

Q: Banks make more money from securitising pools of mortgages rather than holding on to individual…

A: Banks follow the policy of securitisation to reduce the debt burden and free up capital and increase…

Q: If you were on an island with 10 other people and there were no money, do you think that money would…

A: Money economies and barter economies are the two sorts of economies. Our modern economies are based…

Q: The accompanying table shows Francesca's estimated annual benefits of holding different amounts of…

A: The table shows the total benefits Francesca gets from holding different denomination of money. Now…

Q: Comment on the following statement: “The birth of the bond was the second great revolution in the…

A: Bonds are a frequent tool used by enterprises and governments (at all levels) to borrow money.…

Q: How would you determine the interest rate that the bank charges on the transaction?

A: Many payments are made through our bank accounts and each transaction has a cost attached to it. The…

Q: (Q#4) Banks have become much less strict about issuing new credit cards. They are issuing far more…

A: Demand for money refers to the cash balance you need to hold for transaction purpose, precautionary…

Q: There are a number of theories that attempt to explain the observed facts concerning yield curves.…

A: A yield curve is also known as “term structures of interest rates” is line graph that plots the…

Q: Suppose a bank has $100 million in checking account deposits with no excess reserves and the…

A: Required Reserve ration is the minimum amount which is necessary for the bank in order to fulfill…

Q: leverage

A: Leverage in banking terms imply that the optimal utilization of the deposits for the disbursing of…

Q: Unlike commercial banks, savings and loans, andmutual savings banks, credit unions did not have…

A: Despite serving the same purpose of lending and borrowing money for savings and deposit purposes,…

Q: Federal Reserve ended all measures designed to change interest rates and instead allowed rates to be…

A: The federal reserve is a central banking system. It provides all services of the banking and…

Q: Could you add more information regarding the below statement? "I do agree with the notion that the…

A: As economies and societies developed, the study of economics got more complicated. Hence, as a…

Q: Economists John Maynard Keynes and John Hicks argued that, if hedgers tend to hold short positions…

A: Spot Price is defined as the current market price of an asset. It is the price of an investment or…

Q: What are the examples of uses of derivatives in economics?

A: Meaning of Economics: The term economics refers to the situation under which there remain…

Q: what are the economic goals of high-interest rate?

A: The interest rate is a proportion of the principal, which is the amount borrowed, that a lender…

Q: Is barter becoming more or less prevalent in the US economy? What are some underground market…

A: Answer - Need to find- "Thank you for submitting the question.But, we are authorized to solve one…

Q: Which state body determines the value of the interest rate and what instruments are used to regulate…

A: The central bank determines the value of the interest rate and what instruments are used to regulate…

Q: What does it mean to say that a bond has a value less than one for its relative yield differential?…

A: Bonds A bond is a fixed-income asset that symbolizes an investor's debt to a borrower, who is…

Q: Why did the Federal Reserve lower interest rates? What other measures can the Federal Reserve take…

A: Central bank lowers interest rate as a tool or mechanism to increase the economic activities in the…

Question

If the quantity of money supplied exceeds the quantity of money demanded then what can you say about the current rate of interest and what bankers will likely do with the interest rates they charge? Why?

Expert Solution

This question has been solved!

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

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps with 2 images

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

Many countries have policies that limit how much interest a moneylender can charge on a loan. Do you think these limits are a good idea? Who benefits from the laws and who loses? What are likely to be the long-term effects of such laws? Tips: For part 2, you may think about how a low interest rate would affect the poor and those who owe huge debts. For part 3, you may think about how it would affect the profitability of the banking sector and the supply of lending (will lenders be encouraged to lend more?), and what implications it may have for "credit rationing" (being credit constrained).
Who benefits when the Bank of Canada lowers interest rates? Who benefits when interest rates rise? Explain how each policy could directly affect your life and your consumer decisions.
How can banks compute and quote a forward rate to their customers?
What is Money? What makes it useful? Explain its primary and derivative functions of Money? (1000 words)
What is Money? What makes it useful? Explain its primary and derivative functions of Money? explain elaborately?
discuss three ways in which banks are to make profit
"If you were on an island with 10 other people and there were no money, do you think that money would emerge on the scene
Most stores now have the technology to immediately deduct the value of your purchases from your checking account (or charge your credit card with equal speed). How might this affect the money market and the interest rate? Follow-up question: How would your answer to the previous question affect interest rates and income?
Distinguish between Market and Inflation-Free Interest Rates?