What impact would this action have on the economy

Assignment Help Business Economics

Reference no: EM13155767

Suppose the Fed decided to purchase $50 billion worth of government securities in the open market. What impact would this action have on the economy? Specifically, answer the following questions:

(a) How will M1 be affected initially?

Increase by $50 billion
Decrease by $50 billion
No initial change to M1
Not enough information to answer

(b) By how much will the banking systemâ€^TMs lending capacity increase if the reserve requirement is 25 percent?

Looks easy, but the response I gave was 37.5b (50b x .75), but the answer was incorect Please direct me

Reference no: EM13155767

Questions Cloud

Aristotle : Consider what Aristotle would say about the purpose and structure of a college education – what he would say should be the goals of eduction for young adults and how he would say these goals should be achieved. Do you think he is correct about this i..

Determine the estimated population variance : Suppose the counselor found the sum of squared deviations from the mean of the sample to be 135. Given that he tested 10 people, what would the estimated population variance be?

State the direction of the alternative : State the direction of the alternative hypothesis used to test that the demand function is downward sloping. Type gt (greater than), ge (greater than or equal to), lt (less than), le (less than or equal to) or ne (not equal to) as appropriate in the ..

Explain what percentage of the spheres are copper : The total volume of both metals is measured by the displacement of water to be 426 and the total mass is 4.40 . What percentage of the spheres are copper?

What impact would this action have on the economy : Suppose the Fed decided to purchase $50 billion worth of government securities in the open market. What impact would this action have on the economy? Specifically, answer the following questions:

Calculate the ph of the rainwater : The atmospheric sulfur dioxide concentration over a certain region is 0.12 ppm by volume. Calculate the pH of the rainwater due to this pollutant. Assume the dissolution of SO2 does not affect its pressure.

The two indenters result in different measurements. : The manufacturer of hardness testing equipment uses steel-ball indenters to penetrate metal that is being tested. However, the manufacturer thinks it would be better to use a diamond indenter so that all types of metal can be tested. Because of diffe..

Using a manova, try to ascertain : Using a MANOVA, try to ascertain which version of the drug (A, B or C) shows the most promise. Perform the following analyses, and paste the SPSS output into your document.1. Exploratory Data Analysis.

Budgeted cash disbursements : The invoice cost for merchandise purchases represents 75% of the sales price. All purchases are paid in cash. How much are the budgeted cash disbursements for December?

User Account

All Pages