The fed decreases the money supply

Assignment Help Microeconomics
Reference no: EM13697352

Use the supply and demand for Reserves to show what happens to the Federal Funds Rate when The Fed decreases the money supply. Assume that ior < iff < id. What happened to the quantity of borrowed reserves as a result of the action taken by The Fed?

Reference no: EM13697352

Questions Cloud

Condition required for the practice of price discrimination : Which of the following is a condition required for the practice of price discrimination?
Example of the prisoners dilemma : Which of the following is an example of the prisoner's dilemma?
What is the value of the marginal propensity to consume : Consider a simple economy in which investment is constant and equal to $100 billion. There is no government or foreign sector, and the price level is constant. What is the value of the marginal propensity to consume?
Impact the money supply : Explain how the following would impact the money supply: a. People decide to hold more cash b. Banks hold more excess reserves c. The Fed decreases the required reserve rate d. The Fed increases the discount rate
The fed decreases the money supply : Use the supply and demand for Reserves to show what happens to the Federal Funds Rate when The Fed decreases the money supply. Assume that ior
Deposits in excess reserves : Suppose the Fed purchases $250 million worth of securities from banks. If the currency/deposit ratio is 0.6 and The Fed requires banks to hold 12% of their deposits in reserves, how much money will be created through The Fed’s action if banks hold 2%..
Appropriate federal funds rate according to the taylor rule : If the current inflation rate is 3.3%, potential gdp is $16.9 trillion, and actual GDP is $15.7 trillion, what is the appropriate federal funds rate according to the Taylor Rule?
Represents the weekly demand that a local theater faces : The following equation represents the weekly demand that a local theater faces. Qd = 2000 - 25 P + 2 A, where P represents price and A is the number of weekly advertisements. Presently the theater advertises 125 times per week.
What are the three traditional tools of monetary policy : What are the three traditional tools of Monetary Policy? Describe the mechanics of how each change the supply of money in the economy.

Reviews

Write a Review

Microeconomics Questions & Answers

  Embodies the tenets of the sustainable business

Compare and contrast a company of your choice that embodies the tenets of the sustainable business along with one that embodies that of the traditional model.

  Income growth that expanded demand for housing

During the last 10 years, Orlando, Florida, grew rapidly, with new jobs luring young people into the area. Despite increases in population and income growth that expanded demand for housing, the price of existing houses barely increased. Why?

  Market for gasoline

As a result of increased tensions in the Middle East, oil production is down by 1.2 million barrels per day-a 5 percent reduction in the world's supply of crude oil.

  How do you expect changes in microeconomy and macroeconomy

identify a good or service with which you are familiar. what factors have contributed to changes in the supply of and

  Explain direct impact to the economy

Determine what fiscal policy measure has a more direct impact to the economy, an increase in government spending or an equal decrease in taxes if consumer confidence is lower than the previous month.

  Us economy diverges from each of these assumptions

The presumption of efficiency for capitalism is based on the model of perfect competition. Explain the assumptions underlying the model of perfect competition. Provide an example showing how the US economy diverges from each of these assumptions.

  Differences among penalties for violation-enforcing agencies

What are the similarities and differences among Title VII of the Civil Rights Act and Executive Order 11246? Make a chart listing similarities and differences among the two including covered employers, penalties for violation, enforcing agencies, and..

  Included in the regression model

Which of the Gauss-Markov assumptions regarding OLS estimates is violated if there are omitted variables not included in the regression model?

  What is the maximum capital cost

What is the maximum capital cost of the conversion unit for which a refiner should proceed with the investment and what does this tell you about the significance of estimating future product prices?

  What is the sharpe ratio on a portfolio of us stocks

What is the Sharpe ratio on a portfolio of US Stocks and what is the lowest value for such that these numbers from the data are consistent with equation (2)?

  Explain the law of downward-sloping demand

Over the last 30 years in the United States, the realprice of a college education after adjusting for inflation has increased by almost 70 percent.

  Delta-hedged portfolio

Stock registers an unexpected price decrease, Evaluate the value of your delta-hedged portfolio.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd