Economic Accounting
- Show the changes in balance sheets, state what happens to a) reserves or currency in circulation, b) the monetary base, c) the money supply, and d)interest rates.
- The Fed buys $1billion worth of securities from banks.
- The Fed sells $9 billion worth of securities to banks.
- Fed buys $99 million worth of securities from non-bank public and non-bank public holds proceeds in deposit.
- Fed sells $81 million worth of securities to the non-bank public and non-bank public paid by check (from deposit).
- Fed sells $243 million worth of securities to the nonbank public and nonbank public paid for it in currency.
- Fed buys $96 million worth of securities from the nonbank public and the Fed paid for it in currency.
- Banks borrow $996 million worth of Discount Loans from the Fed.
- Banks payback $27 billion worth of Discount Loans from to the Fed.
- Assume the required reserve ratio equals 12%. Find the maximum deposit expansion using the deposit multiplier formula.
- The Fed bought $81 billion worth of securities from the banking system.
- There is a new deposit of $81 billion in the banking system.
- State what happens to the a) excess reserve to deposit ratio, b) bank loans to the public, and c) the money supply.
- market interest rates fall
- expected deposit withdrawals rise
- State what happens to the a) discount loans, b) bank loans to the public, and c) the money supply.
- market interest rates rise
- the discount rate falls
- State what happens to the a) currency to deposit ratio, b) the money supply.
- wealth rises
- liquidity of deposits fall.
- risk on deposits rise.
- trail of information left by deposits fall.
- State what happens to the money supply.
- the ratio of excess reserves to deposit rises
- the required reserves to deposit ratio rises
- the currency to deposit ratio rises
- the monetary base rises.
- By how much would a) reserves, b) the monetary base change when,
The Fed makes an open market purchase of $30 million?
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Category: Sample Questions