Question

There is​ ________ relationship between the real interest rate and net capital outflows A. no B....

There is​ ________ relationship between the real interest rate and net capital outflows

A. no

B.

a positive

C.

a negative

D.

a constant

Which of the following is likely to decrease the federal funds​ rate?

A.

A decrease in the quantity of required reserves

B.The sale of

longminus−term

bonds in open market operations

C.

An increase in the supply of bank reserves

D.

A decrease in the interest paid on reserves deposited at the Fed

Homework Answers

Answer #1

Negative. There is an inverse relation between real interest rate and net capital outflow. Higher interest rate will attract foreign capital and this decreases net capital outflow. Similarly lower interest rate discourage inflows of capital and therefore net capital outflow increases

Increase in supply of bank reserves. in the market for federal funds when there is an increase in the supply of reserves the supply curve shifts to the right and this decreases the federal funds rate.

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
A. The interest rate that the Fed pays on reserves acts as a ceiling on the...
A. The interest rate that the Fed pays on reserves acts as a ceiling on the federal funds rate. True False B. Suppose that the Fed undertakes an open market sale, selling $1 million worth of securities to a bank.  If the required reserve ratio is 8%, checkable deposits (or the money supply), would _______________ by ________________ million, assuming that there are no cash leakages and that banks hold zero excess reserves. rise; $12.5 decline; $8 decline; $12.5 rise; $8 C....
1. When the Fed purchases government bonds, that tends to ___ the federal funds rate and...
1. When the Fed purchases government bonds, that tends to ___ the federal funds rate and ___ the prime rate. a. increase; increase b. increase; decrease c. decrease; increase d. decrease; decrease e. None of the above 2. How does the Federal Reserve affect the supply of money using open market operations? a. The Fed increases the reserve requirements of bank and thus banks must obtain additional funds from the Fed. b. The Fed buys government bonds from banks, which...
The Federal funds rate is: The interest rate that banks charge one another for short-term (typically...
The Federal funds rate is: The interest rate that banks charge one another for short-term (typically overnight) loans. When the Federal Reserve uses open-market operations to sell government bonds, the quantity of reserves in the banking system increases, banks' need to borrow from each other rises , and the federal funds rate increases. The interest rate that banks charge one another for short-term (typically overnight) loans. When the Federal Reserve uses open-market operations to sell government bonds, the quantity of...
Complete the sentences with the correct terms. Some terms may be used more than once, and...
Complete the sentences with the correct terms. Some terms may be used more than once, and some may not be used at all. The Fed ....... controls the money supply through open market operations. For instance, when the Fed buys bonds, this ...... in demand for bonds causes nominal interest rates to ...... . When the Fed buys bonds, bank reserves ........, which reduces the need for banks to borrow. This causes the federal funds rate to ....... . Decrease,...
QUESTION 8 Monetary policy impacts GDP mainly through its effect on… a. government spending. b. investment....
QUESTION 8 Monetary policy impacts GDP mainly through its effect on… a. government spending. b. investment. c. taxes. d. consumption. e. net exports. QUESTION 10 Which of the following best describes the sequence of events in the conduct of contractionary monetary policy using open market operations (in an economy with low inflation and a stable banking system)? a. The Fed lowers the interest rate, which leads to an increase in intended investment spending and an increase in the supply of...
1. A fiscal polciy offset will occur whenever A) the price level rises. B) the interest...
1. A fiscal polciy offset will occur whenever A) the price level rises. B) the interest rate rises. C) the government increases spending in an area that competes with the private sector. D) a, b, and c. 2.  During normal times, discretionary fiscal policy A) is more effective in influencing real GDP than at times of a recession. B) works well because there are no lag problems in influencing real GDP. C) is probably not very effective in influencing real GDP...
You are given the following information about the market for reserves. The current federal funds rate...
You are given the following information about the market for reserves. The current federal funds rate is 1.5%, the discount rate is 1.75%, the interest rate paid on reserves is 1.25%, and the Fed owns $350 billion in government securities. Are there any discount loans outstanding? Why or why not? Suppose the increase in economic activity meant that banks started to increase their lending to businesses. Banks are making loans rather than holding extra cash. Select all that apply. Question...
16. Suppose a bank has $2 million in deposits, a required reserve ratio of 20%, and...
16. Suppose a bank has $2 million in deposits, a required reserve ratio of 20%, and the reserves of $500,000.00. Then it has excess reserves of a. $100,000.00 b. $200,000.00 c. 300,000.00 d. 500,000.00 17. When money is used to express the value of goods and services, it is functioning as a. a medium of exchange b. a store value c. a unit of account d. a standard of value e. all of the above 18. If the Fed wished...
In the money market, if the interest rate exceeds the equilibrium interest rate, there is a...
In the money market, if the interest rate exceeds the equilibrium interest rate, there is a surplus of money. How is the surplus eliminated? A. The high interest rate increases the demand for money, eliminating the surplus. B. People buy bonds to rid themselves of the surplus money, bidding up their price and pushing interest rates down. C. Banks will lend out the surplus, lowering interest rates. D. The Federal Reserve will destroy currency, reducing the quantity of money. ------------------------...
QUESTION 2 In the classical model, because of full employment, real interest rate is A. a...
QUESTION 2 In the classical model, because of full employment, real interest rate is A. a fixed number. B. determined in the labor market equilibrium. C. determined in the goods market equilibrium. D. none of the above. 10 points    QUESTION 3 Which of the following is NOT considered to be a major function of money? A. a way to display wealth. B. medium of exchange. C. storage of value or transfer purchasing power into the future. D. none of...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT