Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Q. Monetary base and the supply of money?
It isn't possible for central bank to print and distribute money -which would increase their debt without increasing their assets. Rather, they change monetary base by purchasing and selling financial assets (generally government bonds) in so-called open market operations.
Let's say that central bank buys government securities for 100 million. They may pay for these bonds basically by printing new bills to amount of 100 million. At first this may seem suspicious and 'too simple'. Though remember that outstanding notes count as a liability for the central bank. When it purchases the government securities, its assets will increase by precisely the same amount as its liabilities.
Characteristically the central bank won't pay cash when it buys government securities. In its place, it will ask seller's bank to credit the individual's account and then will credit the bank's central bank account. This process is equivalent to paying in cash -monetary base will increase by same amount in both cases (remember that banks' assets in the central bank are comprises in the monetary base).
Because this will result in an increase in deposits in the banks, money supply will increase. By the multiplier effect, increases in the money supply would be more than 100 million. This way, central bank can influence the money supply several-fold by changing the monetary base.
Based on the e-Activity, describe the dumping incident and how anti-dumping regulations could have been modified to prevent the incident you described.
use a numerical example to illustrate how credit multiplier works
In a regression analysis, three independent variables are used in the equation based on a sample of forty observations. What are the degrees of freedom associated with the F-statis
Historically, the proportion of students entering a university who finished in 4 years or less was 64%. To test whether this proportion has decreased, 122 students were examined an
What is Treasury bills In most countries you will find many types of government bonds. An important distinction is the duration of the bond, that is, the difference between the
Q. How commercial banks create money? Commercial banks clearly can't influence the amount of currency in economy or monetary base because they aren't allowed to print money. Th
Was money a better store of value in the United States in the 1950s than it was in the 1970s? Why or why not? In which period would you have been willing to hold money? Which one w
The inhabitants of Fantasia live for two periods, 0 and 1. They consume a nonrenewable resource called Fantasium in each period. Fantasium has to be extracted from the ground and t
One constraint in our economy is time. As a society, we make choices about the allocation of time between work and other pursuits. In the US, most workers are eligible for overtime
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 t
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!
whatsapp: +91-977-207-8620
Phone: +91-977-207-8620
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd