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

Q: What are the dangers of increasing the money supply too slowly? Too rapidly?

A: The money supply is a part of the monetary policy, a policy that increases the output and the…

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

A: * ANSWER :-

Q: What happens after the reduction in the reserve ratio that causes the money supply to increase?

A: Reserve ratio is a particular percentage of reserves that each bank has to keep as reserves out of…

Q: Question 10 Which of the following are true about money? There may be more than one answer. a) Money…

A: Money is a commodity that is widely recognized as a means of economic exchange. It is the vehicle…

Q: assuming you are the govenor of the reserve bank,how would you increase the money supply using open…

A: Reserve Bank is the central bank of country. It is responsible to look after the financial system of…

Q: Describe how each of the following can affect the money supply: (a) the central bank; (b) banks; and…

A: The money supply is the total amount of currency and other liquid assets in a country's economy on a…

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: How do investments move if the money supply increases? A) Demand for money falls B) Investments…

A: The relation between money supply and investment spending is positive

Q: What are the impacts that increases/decreases in interest rates and the tightening/loosening of the…

A: Money supply refers to the total amount of monetary assets circulating in an economy during a…

Q: Why does the Fed manipulate the money supply?

A: The Fed is the central bank of country. The Fed is foremost financial institution in the country. It…

Q: How would each of the following affect the demand for money? a tax on bonds held by individuals a…

A:

Q: Why is the money supply curve vertical?

A: The quantity theory of money refers to the theory of money which assumes that the quantity of money…

Q: Which of these would lead to a decrease in demand for money? A) decrease in the price of goods and…

A: We will solve the first three subparts only. Please resubmit the question with any other parts you'd…

Q: How would each of the following affect the demand for money?a forecast by the Central bank that…

A: Equilibrium interest rate: The interest rate at which money supply is equal to the money demanded in…

Q: If the Fed has an interest-rate target, why will an increase in the demand for reserves lead to a…

A: Meaning of Money Supply: The term money supply refers to the situation under which there is an…

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: 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: How does the Federal Reserve control the money supply in the United States

A: The Fed can influence the provision of funds by changiñg the reserve requirements, which usually…

Q: An initial deposit of $10,000 at a ratio of 10% from currency in circulation, will lead to a maximum…

A: Given  Initial deposit D=$10,000 Required reserve ratio =10% In the money market, there are two…

Q: Why should we care about the money supply and what the Federal Reserve is doing?

A: In 2007, the great subprime crisis happened in the US that  was caused by high home prices  and the…

Q: The speculative demand for money is an inverse relationship between interest rates and the demand…

A: Speculative demand for money is one of the three motive of demand for money put forward by J M…

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: How does adjusting the reserve requirements cause the money supply to expand or contract?

A: Reserve requirement is the percentage to the total deposit of commercial bank that has to keep with…

Q: The more people decide to hold currency, :smaller the actual money multiplier .greater control the…

A: Money is anything which is generally accepted as a medium of exchange and measure of value for the…

Q: Which of the following policies by the Federal Reserve is likely to decrease the money supply? A.…

A: The Federal reserve often uses Monetary policy measures in order to control (Decrease/Increase) the…

Q: why money supply curve is vertical; please, explain briefly

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

Q: Explain the determinants of money supply in an economy?

A: According to the given question In simple terms we can say that the money supply is usually known as…

Q: Why are bank accounts included in our definition of the money supply?

A: It is the total stock of money that is held by the people of a country at a particular time.

Q: Explain how to use an open market operation to expand the money supply.

A: Money supply refers to the total sum of money held by the public in the economy at a point in time.…

Q: Which of the following would NOT result in a decreased money supply?

A: Supply of the money in an economy is an important factor causing fluctuation in the economy. An…

Q: Draw a graph and explain what is the overall impact of lower interest rates on the money market

A: Money market is the market for short run fund . Where financial instruments which are traded is…

Q: What is the difference between temporary and permanent changes in money supply?

A: A MP is a policy adopted by the Central Bank or the government of the company to control the supply…

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: If the Bank of Canada has an interest-rate target, what will happen to the money supply if the…

A: The concept of money supply refers to the condition in which there is an overall flow of funds in…

Q: If the Fed wants to increase the money supply withopen-market operations, what does it do?

A: Solution: Open Market: It refers to an economic situation where free trading is happen. Government…

Q: What is the circulation rate of money if GDP = 1000 and money supply is 250

A: The circulation rate of money is the amount of money circulated in an economy during a specific…

Q: Good afternoon please help me with this question from my textbook The monetary authorities in a…

A: Monetary policies: These are the policy measures that are being taken care of by the central bank of…

Q: Why does the Fed manipulate the money supply ?

A: Answer: Introduction: Fed is the central bank of America. It is responsible for controlling…

Q: The demand curve for money is downward sloping because what?

A: The demand for money arises as people decide to hold their money in the form of cash or bank…

Q: what are the componets of money demand , according to marshal and fisher ?

A: Fisher gave the quantity theory of money in which he used money as a flow concept. Only Fisher has…

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.