What term is used to describe the interest rate charged by the central bank when it makes loans to commercial banks? open market rate O Fed rate reserve requirement discount rate
Q: Which Increases the excess reserves of commerclal banks? Multiple Choice The central banks sell…
A: One of the method of increasing the money supply in the economy is open market purchases.
Q: 1)The 'Banks' in the Banks sub-model refers to
A: Hi! Thank you for the question as per the honour code, we’ll answer the first question since the…
Q: In what respects is the central bank like a private banking institution and it what respects is it…
A: The central bank is an apex banking institution in a country. It is responsible to regulate the…
Q: hich of the following is NOT a function of the Federal Reserve? Multiple Choice Supervise banks…
A: The Federal bank is the apex financial institution which has the following functions: It is the…
Q: In the United-States today, which of the following functions as the Central Bank
A: Central bank is the national bank which provides banking services and financial services to the…
Q: In good economic conditions, it is better for the bank to reduce its amount of capital. O True False
A: Bank capital refers to the assets and liabilities held withthe banks and it represents the total net…
Q: Which of the following best describes the main responsibility of a central bank? * A. it acts as an…
A: The central bank is the primary monetary authority of a nation that is responsible for managing the…
Q: identify therelationship between money credit and financial institution
A: The financial institutions aim at increasing the monetary base of the economy but creating credit.
Q: What are the effective Central Bank Frameworks?
A: The operational frameworks of central banks influence their choices and actions. As market…
Q: In 2020, explain how the Federal Reserve is managing the federal funds interest rate, the key…
A: Federal Reserve manages the federal funds interest rate by managing the money supply in the banking…
Q: a) Discuss the benefits and costs of pi ownership of central banks by giving examples from central…
A: A public bank is one that is owned by the government, a municipality, or other government…
Q: In recent years, which of the following has increased the most in quantitative easing by the central…
A: Quantitative easing (QE) refers to the part of central bank's monetary monetary policy. It is the…
Q: Economics Suppose that in some country A banks proportionally adjust their deposit and loan rates…
A: Answer: False
Q: How does the government in our country do the financial supervision Explain the steps of it and take…
A: Government alongwith central bank does financial supervision by conducting survey of financial…
Q: What according to you can be the issues a central bank can face in achieving a target interbank rate…
A: *Answer:
Q: "Why do economists nearly uniformly support an independent Fed rather than one beholden directly to…
A: The Federal Reserve — is the most remarkable monetary establishment in the US, maybe the world.
Q: The following are some of the key functions of the Federal Reserve System, EXCEPT: O Implement…
A: The federal reserve system controls the inflation in the country by implementing the monetary policy…
Q: If all banks in America were member banks, explain why the Federal Reserve could be certain that the…
A: Since you have posted multiple questions, we will answer the first question for you. If you want any…
Q: Compare the structure and independence of theEuropean System of Central Banks and the FederalReserve…
A: Both the banks are central banks of their respective countries. The meetings of European council are…
Q: State and explain at least 2 limitations when the central bank implements monetary policy.
A: Monetary policy is the policy of the central bank of the economy to control the money supply in the…
Q: Questions and problems 1. Explain how a central bank is different to the other financial…
A: Dear learner you have posted multiple questions, as per our policy we have solved only first…
Q: Explain how a central bank can control credit through bank rate and open market operation
A: Open Market Operation is a traditional way to control the credit in the market used by the central…
Q: ase go to www.federalreserve.gov e and briefly describe the structure of the U.S. Federal Reserve…
A: The central banking system of the United States of America is known as the Federal Reserve System.…
Q: Which of the following is not a central bank? a. The Bank of England b. The Bank of Japan…
A: A central bank is a financial institution that provides banking services to the government and…
Q: Use the money demand and money supply model to show graphically and explain the effect on interest…
A: The money demanded and the money supplied curves in the economy determines the interest rate and…
Q: The possibility that the failure of one bank affects the performance of other banks is called:…
A: When there will be a shortage of liquidity within commercial banks, then bank failure may occur. The…
Q: What factors have led to the dominance of the banks? Prove explanations in detail with an example
A: Banks are the authorities that enable flow of money by lending and depositing money of the people.
Q: Why might an independent central bank be preferable to a a trustee bank? What is an example of an…
A: Answer- Need to find- Why might an independent central bank be preferable to a trustee bank? What is…
Q: What is meant when economists say that the Federal Reserve Banks are central banks, quasi-public…
A: The federal reserve system refers to the central banking system that is followed in the U.S. Many…
Q: Explain the main theories of central bank behaviour.
A: Main theories of central bank behavior 1)Monetary stability For monetary stability,central bank may…
Q: Describe how the Great Recession affected the balance sheets of the central bank and the banking…
A: Between 2007 and 2009, the Great Recession was a period of substantial-overall deterioration…
Q: Describe two concepts of central bank independence. Is the Fed politically independent? Why do…
A: Goal independence and instrument independence are two types of central bank independence. In case of…
Q: Banks will go to central bank for loans if federal funds rate is lower than the discount rate. O…
A: The banks sometimes fall short of deposits to fulfill their withdrawal needs or other credit…
Q: The Board of Governors of the Federal Reserve is in charge of setting and overseeing monetary policy…
A: There are several ways an institution's management can be organized, but the most frequent is for a…
Q: As far we know, central bank supervise the member banks and if CB the finds that a bank has not been…
A: Central banks in every economy supervise the way the banks work. They control the money supply in…
Q: Describe the Federal Reserve's monetary policy instruments and how they are used.
A: Various monetary policy instruments of Fed are 1. Required reserve ratio 2. Discount rate 3. Open…
Q: How could the approval of international banking facilities (IBFs) by the Fed in 1981 have reduced…
A: Federal reserve in late 1981 created the international banking facilities in the US and these…
Q: Explain any four instruments that the central bank can use to regulate the financial system?
A: Central bank is said to be a financial institution that has the authority to control money supply of…
Q: Discuss the implication of shadow banking as a source of raising finance in developing economies.
A: Credit creation in the unorganized sector i.e. non-regulated without oversight via financial…
Q: Explain the structure and ownership of the Federal Reserve. What are its roles? How is it managed?…
A: Hey, Thank you for the question. As per our honor, code we can answer only first three sub-parts of…
Q: Would the maximum amount of new bank loans that a commercial bank can make be different when…
A: The discount window can be used to take loans from the federal reserve which can directly be…
Q: How can banks compute and quote a forward rate to their customers?
A: FORWARD RATE: An interest rate charged or applied on the financial transactions that are yet to take…
Q: Which of the following is NOT true about the FederalReserve?a. It was established by the U.S.…
A: Central bank is that institution of a country which regulates the whole banking system in the…
Q: Bank credit creation is seen by Werner as a reason for the Japanese economic boom in the 80’s and…
A: Macroeconomics is a part of economics that deals with production, decision and allocation concerning…
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
- List the three traditional tools that a central bank has for controlling the money supply.How is a central bank different from a typical commercial bank?B1(b) Show consumption c1 and c2 (you can use algebraic or graphical methods). In the answer, you should discuss whether a1 ≥ 0 or a1 < 0 and provide an economic interpretation. What determine(s) the sign of a1 and why? Explain how a credit constraint can be modeled by a1 ≥ 0 and under this constraint how does your answer to B1(b) change? How does it change if there is a banking markup such that the borrowing interest rate is above the interest rate of r = 0 assumed earlier? Hint: try to relate your reasoning to the permanent income hypothesis. Suppose a0 = A0/P1 where A0 ≥ 0 denotes the savings in nominal terms. Consider a supply-side shock that leads to a surprise significant increase of the price level only in period 1. Should the government change its tax plan if a1 ≥ 0 is imposed?
- Compare the structure and independence of theEuropean System of Central Banks and the FederalReserve SystemExplain the factors on which an independent central bank can havepositive impact and the factors on which it might create negativeimpact?Why is credit so important to our economy? Can the economy function without credit? https://www.imf.org/external/pubs/ft/fandd/basics/bank.htm https://www.brookings.edu/research/the-role-of-finance-in-the-economy-implications-for-structural-reform-of-the-financial-sector/ https://www.economicsdiscussion.net/banking/role-of-banks-in-the-economic-development-of-a-country/26094
- Give only typing answer with explanation and conclusion If a bank expects interest rates to go up in six months and it currently has a negative rate-sensitive six-month gap (RSA - RSL), what actions should it take, if any, to preserve or increase its net interest income (NII)?Assuming an economy have only two commercial banks in it banking system, Classic Bank and Prudent Bank. The following shows the balance sheet of the two banks as at 2019.Classic BankBalance sheet as at December, 2019GHSm GHSmAssets: Liabilities & Equity:Reserves 1,000 Deposits 3,000Securities 2,000 Equity 7,000Loans & Advances 1,000Property, Plant and Equipment 6,000 .10,000 10,000 Prudent BankBalance sheet as at December, 2019GHSm GHSmAssets: Liabilities & Equity:Reserves 600 Deposits 2,500Securities 1,500 Equity 4,400Loans & Advances 800Property, Plant and Equipment 4,000 .6,900 6,900Assume a required reserve ratio of 10%.(a) What is the amount of excess reserves in this commercial banking system? (b)What is the maximum amount that the money supply can be expanded? What would be the effect of a fall in reserve ratio to 5%, on the maximum amount that the money supply can be expanded? (c) Determine the stock of broad money supply assuming the non-bank public holds…If the IORB rate is 4.25 percent, the effective federal funds rate is 4.18 percent, and the ON RRP rate is 4.00 percent, which group might lend money in the federal funds market? Commercial banks None of the answer options are correct. Non-bank financial companies The Federal Reserve.
- Supposed that the First National Bank has $300 million worth of rate sensitive assets and $700 million of rate sensitive liabilities, then what will happen to the bank's profits or loss if the market interest rate unexpected increases by 3 percentage point. Show your calculation and explain.(M/P)d = 1,000 − 100r,M = 1000P = 2.a) Graph the supply and demand for real money balances.b) What is the equilibrium interest rate?c) Assume that the price level is fixed. What happens to the equilibrium interest rate if the supply ofmoney is raised from 1,000 to 1,200?d) If the Central Bank wishes to raise the interest rate to 7 percent, what money supply should it set?Your childhood friend believes Commercial banks no longer have any relevance in the current economic climate and instead he believes we should do FX trading instead. He doesnt understand the financial system but ask your guidance in explaining how commercial banks really make money? Kindly provide a brief response with examples in your response to him.
