Maintaining a fixed interest rate, Financial Accounting

During summer of 2006, China increased their reserve requirement for the banking system while maintaining a fixed target for the interbank lending interest rate. Draw a graph of the market for reserves when a central bank increases the reserve ratio while maintaining a fixed interest rate. What effect would such a policy have on the monetary base? If there is no excess reserve, what effect would such a policy have on the money multiplier? Can we say what would be the effect on the money supply? (Assume that the target interest rate is below the discount rate and the central bank in China does not pay interest on reserves.)

 

Posted Date: 3/26/2013 2:54:53 AM | Location : United States







Related Discussions:- Maintaining a fixed interest rate, Assignment Help, Ask Question on Maintaining a fixed interest rate, Get Answer, Expert's Help, Maintaining a fixed interest rate Discussions

Write discussion on Maintaining a fixed interest rate
Your posts are moderated
Related Questions
Illustrations of Dissolutions X, Y and Z have been trading as partners sharing profits and losses in the ratio of 2:2:1 on the 1st July 2005, they decided to dissolve the partn

What role does accounting play in the planning, implementation, analysis of CSR in particular and organizational strategies in general?

Presentation method (formerly closing rate or net investment method) Under this method, the branch operates with a lot of degree of autonomy from the head office. This position i

Trustees remuneration A trustee may not receive remuneration except: 1. By order of the court, if the trust is very onerous or the services of the trustee very valuable;

Procedure after Winding-up Order 1. A copy of the order must be filed by the company with the registrar s.227. 2. The company must deliver a statement of affairs to the Offici

Concept  of Financial statements  Financial statements portray the financial effect of transactions and events by grouping them into classes broadly called elements. A complete

During 2011, Lavina Corporation had cash and credit sales of $94,000 and $91,000, respectively. The company also collected accounts receivable of $53,400 and incurred expenses of $

how to treat salary compensation given to an employee how to show this in company account

A company is considering investing some independent proposals, The proposals with their expected net present values and standard deviations are given in the following table.

1. Select a publicly traded company (preferably manufacturing oriented; do not use a financial services company such as a bank or a bank holding company) and obtain a copy of their