Question

Which of the following actions would cause an increase to the money supply? A. The New...

Which of the following actions would cause an increase to the money supply?
  • A. The New York Fed trading desk sells Treasury securities in the secondary market.
  • B. The Federal Reserve Board of Governors raises the discount rate.
  • C. The New York Fed trading desk purchases Treasury securities in the secondary market.
  • D. The Federal Reserve Board of Governors raises the reserve requirements.
  • E. both (C) and (D).
Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

The answer to the question is c ) the NY fed trading desks purchase treasury in the secondary market

Because when fed will purchase securities, it will give out money in the secondary market and banks will have more to lend and will lower interest rate and thus money supply will increase

A is incorrect because its the opposite of c.

B ) if fed raises the discount rate, it will decrease the amount of money supply

D is incorrect because if reserve requirment will increase, banks will have less to loan out in the market therefore money supply will decrease

I hope this helps

Please press the like button

Took real efforts

Thanks & Regards

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Which of the following actions by the Federal Reserve would reduce the money supply? (You can...
Which of the following actions by the Federal Reserve would reduce the money supply? (You can only answer once) an open-market purchase of government bonds a reduction in banks’ reserve requirements an increase in the interest rate paid on reserves a decrease in the discount rate on Fed lending
6. How will the following actions affect the money supply? (a) a reduction in the discount...
6. How will the following actions affect the money supply? (a) a reduction in the discount rate (b) an increase in the reserve requirements (c) the purchase by the Fed of $100 million of U.S. securities from a commercial bank (d) the sale by the Fed of $200 million of U.S. securities to a private investor
If the head of the central bank wants to expand the supply of money, which of...
If the head of the central bank wants to expand the supply of money, which of the following would do it? Explain how the policy impacts the money supply, and find the policies that might increase the money supply. 1. Increase the required reserve ratio 2. Decrease the required reserve ration 3. Increase the discount rate 4. Decrease the discount rate 5. Buy government securities in the open market 6. Sell government securities in the open market 7. (Review for...
What happens to the money supply and the economy when the following monetary policy actions are...
What happens to the money supply and the economy when the following monetary policy actions are taken: Reserve Requirements are increased? Reserve Requirements are decreased? The Fed sells bonds? (also called quantitative tightening) The Fed buys bonds? (also called quantitative easing) Discount rate increases? Discount rate decreases?
Which of the following would NOT decrease the supply of money in a fiat money economy?...
Which of the following would NOT decrease the supply of money in a fiat money economy? a. The Federal Reserve decides to sell existing treasury securities. b. The Federal Reserve increases the required reserve ratio. c. The Federal Reserve decides to link the value of money to a scarce, rare earth metal. d. The Federal Reserve decides to link the value of money to water (a commodity). e. The Federal Reserve increases the discount rate.
Which of the following statements lists contractionary monetary policies? A) The Fed sells bonds, lowers the...
Which of the following statements lists contractionary monetary policies? A) The Fed sells bonds, lowers the discount rate, and raises the reserve requirements. B) The Fed sells bonds, lowers the discount rate, and lowers the reserve requirements. C) The Fed purchases bonds, lowers the discount rate, and lowers the reserve requirements. D) The Fed sells bonds, raises the discount rate, and raises the reserve requirements.
When the New York Fed's trading desk sells government securities in the open market, there is...
When the New York Fed's trading desk sells government securities in the open market, there is -increase in the federal funds rate -no change in the federal funds rate -increase in the discount rate -decrease in the discount rate
Using a supply and demand graph of the market for money, show the effects on the...
Using a supply and demand graph of the market for money, show the effects on the nominal interest rate if the Fed takes the following monetary policy actions: a. The Fed lowers the discount rate and increases discount lending. b. The Fed increases the reserve requirements for commercial banks. c. The Fed conducts open market sales of government bonds to the public. d. The Fed decreases the reserve requirements for commercial banks.
1. Why does an increase in reserve requirements cause a decrease in the money supply? 2....
1. Why does an increase in reserve requirements cause a decrease in the money supply? 2. Why does a decrease in reserve requirements cause an increase in money supply?
Explain how each of the following situations changes the quantity of money (money supply) in the...
Explain how each of the following situations changes the quantity of money (money supply) in the economy, based on its computed change in the money supply. a) The Federal Reserve System buys bonds b) The Federal Reserve System auctions credit c) The Federal Reserve System raises the discount rate d) The Federal Reserve System raises the reserve requirement
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT