Business, 23.07.2020 05:01, Geo777

Suppose the reserve requirement is 10% and that the Federal Reserve has established a 6% target for the federal funds rate. The federal funds market and the money market are in equilibrium as shown in the graphs below. a. Suppose the Federal Reserve decides it needs to lower the federal funds rate from 6% to 5%. It will require a $20 billion open market purchase to achieve this goal. Show this change in the supply of reserves curve and indicate the new quantity of reserves in the federal funds market. Instructions:
Draw a new supply of reserves curve. Use the tool provided "New Quantity' to plot the new equilibrium quantity of reserves in the federal funds market.
b. If the Federal Reserve makes an open market purchase of $20 billion, the total money supply will increase by $ billion.
c. When the total money supply increases, there will be an adjustment to the interest rate in the money market. Use the money market graph and show the change in the money supply and interest rates in the money market.
Instructions: Draw a new money supply curve. Use the tool provided 'New Equilibrium' to plot a new equilibrium and interest rate.
d. When the Fed lowers the target federal funds rate, reserves , causing the money supply to , and interest rates (for borrowing and lending money) will .

Answers: 1

Show answers

Other questions on the subject: Business

Business, 22.06.2019 03:30, emmanuelcampbel

Nellie lumpkin, who suffered from dementia, was admitted to the picayune convalescent center, a nursing home. because of her mental condition, her daughter, beverly mcdaniel, signed the admissions agreement. it included a clause requiring the par- ties to submit any dispute to arbitration. after lumpkin left the center two years later, she filed a suit against picayune to recover damages for mistreatment and malpractice. [covenant health & rehabilitation of picayune, lp v. lumpkin, 23 so.2d 1092 (miss. app. 2009)] (see page 91.) 1. is it ethical for this dispute—involving negligent medical care, not a breach of a commercial contract—to be forced into arbitration? why or why not? discuss whether medical facilities should be able to impose arbitration when there is generally no bargaining over such terms.

Answers: 3

continue

Business, 22.06.2019 12:10, gingerham1

Laws corporation is considering the purchase of a machine costing $16,000. estimated cash savings from using the new machine are $4,120 per year. the machine will have no salvage value at the end of its useful life of six years and the required rate of return for laws corporation is 12%. the machine's internal rate of return is closest to (ignore income taxes) (a) 12% (b) 14% (c) 16% (d) 18%

Answers: 1

continue

Business, 22.06.2019 20:20, martinezarielys17

As you have noticed, the demand for flip phones has drastically reduced, and there are only a few consumer electronics companies selling them at extremely low prices. also, the current buyers of flip phones are mainly categorized under laggards. which of the following stages of the industry life cycle is the flip phone industry in currently? a. growth stage b. maturity stage c. decline stage d. commercialization stage

Answers: 2

continue

Business, 22.06.2019 22:30, aaroneduke558

Perry is a freshman, he estimates that the cost of tuition, books, room and board, transportation, and other incidentals will be $30000 this year. he expects these costs to rise about $1500 each year while he is in college. if it will take him 5 years to earn his bs, what is the present cost of his degree at an interest rate of 6%? if he earns and extra $10000 annually for 40 years, what is the present worth of his degree.?

Answers: 3

continue

Do you know the correct answer?

Suppose the reserve requirement is 10% and that the Federal Reserve has established a 6% target for...