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Author Question: Assume there is no leakage from the banking system and that all commercial banks are loaned up. The ... (Read 70 times)

cagreen833

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Question 1

An open-market sale of securities by the Fed results in ________ in reserves and ________ in the supply of money.


◦ an increase; a decrease
◦ an increase; an increase
◦ a decrease; an increase
◦ a decrease; a decrease

Question 2

Assume there is no leakage from the banking system and that all commercial banks are loaned up. The required reserve ratio is 16%. If the Fed sells $5 million worth of government securities to the public, the change in the money supply will be


◦ -$31.25 million.
◦ -$21 million.
◦ -$16 million.
◦ -$11.75 million.


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Marked as best answer by cagreen833 on Apr 19, 2019

qytan

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cagreen833

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Reply 2 on: Apr 19, 2019
YES! Correct, THANKS for helping me on my review


31809pancho

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Reply 3 on: Yesterday
Excellent

 

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