C211 COMPETENCY 4 QUESTIONS WITH
VERIFIED ANSWERS { GRADED A+}
the interest rate at which banks make overnight loans to one another - ✔✔federal
funds rate
the federal funds rate is aka ____________________ - ✔✔equilibrium interest
rate
deposits that banks have received but have not loaned out - ✔✔reserves
The rate of interest the Fed charges banks when banks borrow from them -
✔✔discount window rate
the fraction of deposits that banks hold as reserves - ✔✔reserve ratio
regulations on the minimum amount of reserves that banks must hold against
deposits - ✔✔required reserve ratio
, The buying and selling of US gov't treasuries (bonds) - ✔✔open market
operations
an open market purchase of bonds by the Fed does what to the money supply? -
✔✔increases the money supply
what happens when the Fed sells bonds from its portfolio to the public? - ✔✔the
dollars the Fed receives from the sale is now out of the public's hands reducing
money supply
(3) actions the Federal Reserve can take to decrease the money supply - ✔✔open
market sale of bonds, increase the discount window rate, increase reserve
requirements ratio
(3) actions the Federal Reserve can take to increase the money supply - ✔✔open
market purchase of bond, decrease discount window rate, decrease reserve
requirements ratio
what are the (2) implications of decreasing the money supply - ✔✔increase in
federal funds rate and decrease in aggregate demand
VERIFIED ANSWERS { GRADED A+}
the interest rate at which banks make overnight loans to one another - ✔✔federal
funds rate
the federal funds rate is aka ____________________ - ✔✔equilibrium interest
rate
deposits that banks have received but have not loaned out - ✔✔reserves
The rate of interest the Fed charges banks when banks borrow from them -
✔✔discount window rate
the fraction of deposits that banks hold as reserves - ✔✔reserve ratio
regulations on the minimum amount of reserves that banks must hold against
deposits - ✔✔required reserve ratio
, The buying and selling of US gov't treasuries (bonds) - ✔✔open market
operations
an open market purchase of bonds by the Fed does what to the money supply? -
✔✔increases the money supply
what happens when the Fed sells bonds from its portfolio to the public? - ✔✔the
dollars the Fed receives from the sale is now out of the public's hands reducing
money supply
(3) actions the Federal Reserve can take to decrease the money supply - ✔✔open
market sale of bonds, increase the discount window rate, increase reserve
requirements ratio
(3) actions the Federal Reserve can take to increase the money supply - ✔✔open
market purchase of bond, decrease discount window rate, decrease reserve
requirements ratio
what are the (2) implications of decreasing the money supply - ✔✔increase in
federal funds rate and decrease in aggregate demand
