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Pls help with below homework. Explain in 7-8 sentences only
When and how would the FOMC use quantitative easing and targeted asset purchases?
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- Suppose you are in charge of the financial departmentof your company and you have to decide whether toborrow short or long term. Checking the news, yourealize that the government is about to engage in amajor infrastructure plan in the near future. Predictwhat will happen to interest rates. Will you advise borrowing short or long term?(1) Why would a company’s financial managers wantto pay attention to the federal funds rate? (2) Ratherthan promising to support any too-big-to-fail banks,could the federal government instead simply warneveryone that doing business with one of these firmsis risky? Why or why not?The Bangladesh Bank has created additional money worth Tk70,794 crore through variousrefinance schemes and easing regulatory requirements after the Covid-19 outbreak in March forstimulating demand to revive the declining economy. (link:https://tbsnews.net/economy/banking/bangladesh-bank-creates-money-worth-over-tk70000cr-revive-economy-76435?fbclid=IwAR108OXKcbXq6JjZj6v9FbULrDtys_QsZySUTKeAmauoqTjppgnLqU89muw#.Xq5kdXhgRqq.facebook).Do you think creating this additional money will lead to inflation? What type of inflation,demand-induced or supply-induced? Do you think it will be continued inflation? Why? Draw arelevant diagram to explain your answer.
- 1.Would each of the following groups to be happy or unhappy if ringgit appreciated? Explain. A) Hong Kong pension funds holding Malaysian government bonds. B) Malaysian manifacturing industries.C) Australian tourists planning a trip to Malaysia. D) A Malaysian firm trying to purchase property overseas.Suppose the U.S. economy began to grow morerapidly than other countries in the world. What would bethe likely impact on U.S. financial markets as part of theglobal economy?If a particular fintech company is likely to disrupt anyaspect of the country’s financial system, should thegovernment take steps to prevent it from doing so? Why orwhy not?
- Bond A pays $8,000 in 20 years. Bond B pays $8,000in 40 years. (To keep things simple, assume that theseare zero-coupon bonds, meaning the $8,000 is theonly payment the bondholder receives.)a. If the interest rate is 3.5 percent, what is the valueof each bond today? Which bond is worth more?Why? (Hint: You can use a calculator, but the ruleof 70 should make the calculation easy.)b. If the interest rate increases to 7 percent, what isthe value of each bond? Which bond has a largerpercentage change in value?c. Based on the example above, complete the twoblanks in this sentence: “The value of a bond[rises/falls] when the interest rate increases,and bonds with a longer time to maturity are[more/less] sensitive to changes in the interestrate.”Which of the following institutionsmay buy government bonds in BOTHthe primary and the secondarymarket, in most developed countries?a. foreign investorsb. large financial institutions with abundant liquidityc. corporationsd. the central banka) Discuss the monetary policy origins of asset price bubbles. What are the potential remedies? b) Would bond financed budget deficit be less inflationary than the latter financed by new money? A detail answer would be appreciated
- Suppose that people in France decide to permanentlyincrease their savings rate. Predict what will happento the French bond market in the future. Can Franceexpect higher or lower domestic interest rates?In early 2016 as the Bank of Japan began to push policyinterest rates negative, there was a sharp increase insales for homes in Japan. Why might this be, and whatdoes it mean for the effectiveness of negative interestrate policy?The Bangladesh Bank has created additional money worth Tk70,794 crore through various refinanceschemes and easing regulatory requirements after the Covid-19 outbreak in March for stimulatingdemand to revive the declining economy (link: https://tbsnews.net/economy/banking/bangladesh-bank-creates-money-worth-over-tk70000cr-revive-economy-76435?fbclid=IwAR108OXKcbXq6JjZj6v9FbULrDtys_QsZySUTKeAmauoqTjppgnLqU89muw#.Xq5kdXhgRqq.facebook) What type of monetary policy is this? Expansionary or contractionary? Draw a diagram toexplain your answer.
