Please help, Microeconomics

1. Suppose the banking system has reserve of $750000, demand deposits of $2500000 and a reserve requirement of 20%.

a. if the fed now purchases $125,000 worth of govt bonds from the public, what are the excess reserves of the banking system? (Assume the public deposits the entire $125,000 in the demand deposits)
b. How much can the banking system increase the money supply by, given the new reserve position?

c. Using graphs, explain in detail how the change in moneysupply affects investment demand and as a consequence, aggregate demand. What roles does the spending mutliplier play in this process? Explain.

d. What is the impact of the FED''s actions on GDP, umemployment, and inflation?
Posted Date: 4/30/2012 8:25:35 PM | Location : United States







Related Discussions:- Please help, Assignment Help, Ask Question on Please help, Get Answer, Expert's Help, Please help Discussions

Write discussion on Please help
Your posts are moderated
Related Questions
Supply of Basic Industrial Inputs: Allowing their duty-free imports by exporters would require an elaborate machinery of customs and import licensing to ensure that the impor

Explain about the deadweight loss and elasticitie s. Deadweight Loss and Elasticities The general rule for economic policy is the other things equivalent; you need to choose


Analyse the possible effects of speculation on exchange rates. Definition of speculation in currencies as betting on the appreciation/depreciation of a given currency. E

Sita expects her future earnings to be worth Rs. 100. If she falls ill, her expected future earning will be Rs. 25. There is a belief that she may fall ill with probability of , -


1) Vitamin A Vitamin A has been chosen as the vitamin to be included in the supplement since it has a role in several functions some of which as follows: 1. Helps in proper vision.

what is microeconomics

#question.what is elasticity of demand? .

if you were making the pricing decision for the gasoline company, would you cut, raise or leae the price unchanged