13. Bankers’ decisions on how much to hold in reserves influence the supply of money. True...

13. Bankers’ decisions on how much to hold in reserves influence the supply of money.

True

False

14. Inflation increases the use of money as a store of value.

True

False

15. Labor is defined as cheap only if its productivity is very low.

True

False

16. A credit card is a form of money.

True

False

17. Exports are goods produced domestically and sold abroad.

True

False

18. When the dollar depreciates, the prices of imported inputs rise, and the U.S. aggregate supply curve, therefore, shifts inward, pushing up the prices of American-made goods and services.

True

False

Solutions

Expert Solution

Rahul Sunny answered 1 month ago

Next > < Previous

Related Solutions

What are excess reserves? What are the factors that determine how much a bank would like to hold in excess reserves? Briefly explain.

A. What are excess reserves? What are the factors that determine how much a bank would like to hold in excess reserves? Briefly explain.B> One morning the Open Market Account Manager at the New York Federal Reserve Bank observes that the equilibrium (market) federal funds rate is 3.25%. Suppose the target federal funds rate is 2.5%. What does this indicate about total reserves in the banking system? What would the Account Manager decide to do (open market purchase or open...

If reserves are scarce, how would the money supply M change (increase or decrease)

If reserves are scarce, how would the money supply M change (increase or decrease) and why (due to an increase, decrease, or no change in the monetary base B, in the reserve-deposit ratio rr, or in the currency-deposit ratio cr) if:(a) the central bank conducts overnight repurchase operations.(b) the central bank conducts overnight reverse repurchase operations.(c) the central bank increases the required reserve-deposit ratio.(d) an article reporting a significant surge in cases involving counterfeit currency becomes viral.(e) all drugs are...

If reserves are scarce, how would the money supply M change (increase or decrease) and why...

If reserves are scarce, how would the money supply M change (increase or decrease) and why (due to an increase, decrease, or no change in the monetary base B, in the reserve-deposit ratio rr, or in the currency-deposit ratio cr) if: a) an article reporting a significant surge in cases involving counterfeit currency becomes viral. b) all drugs are legalized. Just analyze in these two situations how would money supply change. The question is complete, if you can't give answer...

Assume that banks do not hold excess reserves and that households do not hold currency, so the only form of money is checkable deposits.

6. The reserve requirement, open market operations, and the money supply Assume that banks do not hold excess reserves and that households do not hold currency, so the only form of money is checkable deposits. To simplify the analysis, suppose the banking system has total reserves of $400. Determine the money multiplier and the money supply for each reserve requirement listed in the following table A higher reserve requirement is associated with a _______ money supply.Suppose the Federal Reserve wants to increase...

How does the Fed now try to influence the money supply? Compare and contrast to the...

How does the Fed now try to influence the money supply? Compare and contrast to the pre-Crisis instruments used. Why does this situation present many unknowns for the success of future policy?

16. Explain how each of the following would influence the money multiplier and the supply of...

16. Explain how each of the following would influence the money multiplier and the supply of money: A. The central bank buys government bonds in the open market. B. A run on the banks to withdraw deposits. C. The Fed reduces banks’ ability to borrow from the Fed.

1. How can a central bank influence the supply and demand for money in a country’s...

1. How can a central bank influence the supply and demand for money in a country’s economy? Why do the amount and price of money matter? Describe some of the connections between a country’s money supply and its international balance of payments.

An open market sale will A. Increase the bank reserves and money supply, and causes the...

An open market sale will A. Increase the bank reserves and money supply, and causes the federal funds rate to fall. B. Reduce the bank reserves and money supply, and causes the federal funds rate to raise. C. Increase the bank reserves and money supply, and causes the federal funds rate to raise. D. Reduce the bank reserves and money supply, and causes the federal funds rate to fall.

8. Determine how each of the following Fed actions would affect bank reserves, the money supply,...

8. Determine how each of the following Fed actions would affect bank reserves, the money supply, and the federal funds rate. Answer INCREASE, DECREASE, or NO EFFECT. Fed Action Bank Reserves Money Supply Fed Funds Rate Sell Treasury bonds on the open market Buy Treasury bonds from banks Raise the discount rate Lower the discount rate Raise the reserve requirement Lower the reserve requirement

Discuss the mechanisms used by the Bank of Canada to influence the money supply.

Discuss the mechanisms used by the Bank of Canada to influence the money supply. Use a simple numerical example to illustrate this. What role does the reserve ratio play

Subjects