NIPA means A) New Income and Price Accounting. B) National ...

[BrownTown3]

NIPA means
 
  A) New Income and Price Accounting.
  B) National Investment and Productivity Approach.
  C) Neutral Increase of Production Allocation.
  D) National Income and Product Accounts.

Question 2

Suppose the Fed makes a 5 million discount loan to a bank. Illustrate how this affects the balance sheets of the Fed and the banking system.
 
  What will be an ideal response?

[l.stuut]

Answer to Question 1

D

Answer to Question 2

The Fed's assets increase as discount loans rise by 5 million and its liabilities increase by 5 million as reserves increase. The banking system's assets increase as reserves rise by 5 million and its liabilities increase by 5 million due to the increase in discount loans.

[BrownTown3]

Thanks for the timely response, appreciate it

[sarah_brady415]

Gracias!