why money supply curve is vertical; please, explain briefly

Q: Which of the following is the most "liquid" in the Money Market? A. Retirement Accounts B. Treasury…

A: * ANSWER :-

Q: Why does the Federal Reserve not have complete control over the size of the money supply? Give at…

A: Money Supply: - In an economy the total value of money in circulation at a point of time is known as…

Q: Assume that the banking system has total reserves of Rs.200 billion. Assume also that required…

A: Total reserves banking system has= 200 billion Required reserve ratio= 12.5%

Q: What tools does the Feds use to control money supply? List and briefly describe each. How are those…

A: The discount rate, reserve ratios, open market operations, and interest on reserves are four…

Q: How will each of the following affect the money supply though the money multiplier process? Explain.…

A: Money multiplier measures the amount by which the money supply is likely to increase under a system…

Q: Money demand curve is downward sloping because as interest rate rises, businesses find it less…

A: The curve that depicts the inverse relationship between the rate of interest and the quantity of…

Q: Use the following data to answer the below question. Required reserve $50 Checkable deposits $500…

A: Money supply is the sum of currency in Hand and deposits Monetary Base is the sum of Reserves and…

Q: What is the value of the monetary base, given that the value of deposits at all depository…

A: Monetary base:Monetary base can be calculated as follows:

Q: Explain how to use the discount rate to expand the money supply.

A: If commercial bank purchase straight from the central bank, the discount rate is the interest rate…

Q: If velocity is constant at 10 and the money supply decreases from $1,800 billion to $1,400 billion,…

A: We know that fisher equation of exchange is  MV = PT  Where M - Money supply  V - Velocity = 10  P -…

Q: The central bank in Malaysia has bought $100 in bonds from a bank. The reserve requirement is 25%.…

A: The money supply is the total amount of money that circulates in the economy. The money supply is…

Q: What are the two reasons that people want to hold money? In other words, what are the two types of…

A: In general, individuals prefer to have their cash on hand rather than deposit it in a bank. Cash or…

Q: Define the term “money”.    List and describe the four functions of money.

A: Invention of money helps to solve the drawback of the barter system.

Q: With an example, illustrate how the multiple deposit contraction process influences money supply.

A: Deposit Contraction - If banks have extra reserves, they can lend more and expand the money supply.…

Q: describe the effect on the money supply of the following monetary policies The Fed purchases $20…

A: Since you have posted a question with multiple sub-parts, we will solve the first three sub-parts…

Q: Why is the use of the discount rate less effective in influencing money supply than the statutory…

A: Monetary policy is a set of measures that a country's central bank can use to encourage long-term…

Q: If the banks in this economy all hold 10% of the demand deposits as reserves, what is the money…

A: The Reserve ratio is the minimum portion of the money that the commercial banks need to hold to meet…

Q: Calculate the value of money multiplier if legal reserve ratio is 17%

A: # we know well that the money multiplier is given as the reciprocal of the leval reserve ratio that…

Q: Explain the different money aggregates and its components.

A: Money supply is the summation of the value of money that circulates in the economy during a period…

Q: Explain the major functions of the Federal Reserve.

A: We only answer one question so we will answer the first one. Please submit a new question specifying…

Q: The U.S. money supply (M1) at the beginning of 2015 was $2,683.3 billion broken down as follows:…

A: We are going to discuss the checkable money deposits as a part of M1 money to answer this question.

Q: Discuss why the money supply curve is vertical.

A: Money Supply refers to the total amount of money held by the public at a particular point of time in…

Q: Why do people demand for money? Discuss the different motives of holding money.

A: The demand for money is termed as to how many assets a person wishes to hold in the form of money…

Q: What is money? Explain in terms of the functions of money. Define M1.

A: Money is the most important discovery in Modern Economy. All the economic activities revolve around…

Q: 43. Which of the following does not explain what currently backs the money supply in the United…

A: The money  supply is the stock of money with people during the year .  Supplier of money are the…

Q: What is the difference between portfolio and transactions theories of money demand.

A: The Portfolio Demand for Money is that, Money is just one of many financial instruments that we can…

Q: According to John Maynard Keynes,   the demand for money in a country is determined entirely by that…

A: Keynes explained the asset motive through what he termed 'speculative demand'. In this theory, he…

Q: Q4. The Bank can influence interest rates and the money supply through the following means: The…

A: a) Target overnight rate:-  Overnight loans was created to assist banking institutions in obtaining…

Q: The Central Bank of the US. published this information about money supply in 2019: Currency…

A: Money in most simple words defined as a medium of exchange. It has been divided into various forms…

Q: Please explain the functions of money and each money supply level.

A: Money is an economic instrument that acts as a medium of exchange and allows economic agents to…

Q: During COVID 19 pandemic in 2020, many people decided to hold less cash due to the fear of infection…

A: When due to COVID 19 pandemic in 2020, if people decide to hold less cash due to the fear of…

Q: Explain the different determinants of money supply in a country.

A: Money Supply refers to the stock at a particular point of time, though it conveys the idea of a flow…

Q: Explain with graph and economic solution Why credit card is not defined as money?  How online…

A: "Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: Illustrate the overall impact of lowering short term interest rates on the money market.

A: Money Supply: - In an economy, the total value of money in circulation at a point in time is known…

Q: to calculate the money multiplier at each of the following values for the reserve requirement. 3. RR…

A: The formula is: Multiplier=1RR RR=0 then Multiplier is infinity.

Q: Please explain the difference between the transaction demand for money and the asset demand for…

A: Transaction demand of money refers to the demand for money that is cash and checking account balance…

Q: a. Explain the impact of the following events on the money market equilibrium and equilibrium…

A: NOTE: Since you have asked multiple questions , we will solve the first question for you which has…

Q: s a

A: The money supply includes all the currency and the other instruments being liquid of a country on…

Q: What is the multiplier effect of money supply.

A: Multiplier effect of money supply would be the increase in the circulation of money.

Q: In October 2008, the Federal Reserve began paying interest on the amount of excess reserves held by…

A: If the Federal Reserve paying interest on the amount of excess reserves held by banks, it will…

Required Reserve and Excess Reserve Analysis

A required reserve is an amount of cash that banks must keep with themselves, which is certain percentage of the deposits made by their customers. Required reserve is a percentage of the bank's deposits that the respective bank must have on each overnight. The percentage rate is set and determined by the nation’s central bank. It is important to have such funds accumulated to meet its uncertain obligations, sudden liabilities and withdrawals. Required reserve is also known as reserve ratio. Reserve ratio is an important tool to control the money supply.