What amount of us securities will it have to sell

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Reference no: EM13192526

Year 1: money supply= $400 billion
Long-term growth of potential GDP= 3%
Velocity= 4 and constant
No excess reserves
Reserve requirement is 10%
Economy is operating at full-employment real output
A) What is the level of nominal GDP in year 1?
B) The Fed adheres to a monetary rule through open market operations. What amount of US securities will it have to sell to, or buy from, banks or the public between years 1 and 2 to meet its monetary rule?

Reference no: EM13192526


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