The Market(Economy) is in a recession. The Federal Reserve start an open market operation. Explain in detail how economy will respond.

1. Explain how the Open Market Operation will impact the real economy,
2. Explain the Open Market Operation's impact on asset allocations and the prices of securities;
3. Explain each step of the adjustment of this process
4. Graph the process.     

As a result of technology, more and more of us are interacting with and operating within networks than ever before. Facebook is an obvious example of how network externalities are generated by the addition of new users. How has your own life (social, work and school related) been affected by the growing importance of networks? Can you think of any downsides to the trend?

Suppose a Cobb Douglass production function with two inputs and exponents inside the production function y = x α1 1 x α2 2 that are less than one. Derive the profit maximizing choices of x1, x2, and y for arbitrary prices. How does this simply if α1 and α2 sum up to one?

2. a) How do the demand curves for a perfectly competitive firm, monopolistically competitive firm, and a monopoly firm differ?

b) Briefly explain why monopolists are neither productively nor allocatively efficient. What results from these circumstances?

1. Jenifer lives two periods. In the first period her income is fixed at $10,000; in the second it is $20,000. She can borrow and lend at a rate of 10%.

1. The interest rate increases to 15%. Intuitively (you don’t have to draw the graph) what do you expect this to do to her saving? Explain.
2. Imagine Jenifer can only save, but cannot borrow. If she still faces an interest rate of 10%, show her budget constraint.
3. Would this borrowing constraint necessarily affect Jenifer’s behavior? Explain.

Economic 315: Money, Banking and Financial Market

1. Is there any relationship between increase in corporate debt and corporate investing? Explain.

2. What is the alternative to investing that money in their corporations?

3. What is the purpose of stock buybacks?

4. Do you think stock buybacks are the good for the economy? Why or why not?

China is currently rising and is slowly become a world power.

My question is that is there anything that could hold back China's rise?

8.According to the textbook, which of the following statements is (are) correct?

(x)Fractional reserve banking is a system where banks must hold an amount of cash based on a percentage of its loans.

(y)The Federal Reserve can alter the size of the money supply by changing reserves or changing reserve requirements.

(z)If the Fed decreases reserve requirements, the money supply will decrease.

A.(x), (y), and (z)B.(x) and (y) only C.(x) and (z) only D.(y) and (z) only E.(y) only

9.The Federal Reserve System regulates the money supply primarily by

A.restricting the issuance of Federal Reserve Notes.

B.controlling the production of coins at the United States mint.

C.varying the reserves of banks, largely through sales and purchases of government bonds.

D.altering the reserve requirements of banks and thereby the ability of banks to make loans.

Which of the following statements about the Federal Reserve is (are) correct?

(x) When the Federal Reserve conducts open market transactions, it buys or sells government bonds from the public and these actions allow the Fed to control the level of reserves in the banking system.

(y)In general, if the Fed bought a bond from a bank via the open market, then the bank’s excess reserves would increase and the money supply would increase if the bank loans out all of its excess reserves.

(z)If the Fed buys government bonds then the money supply will eventually decrease.

A.(x), (y), and (z)B.(x) and (y) onlyC.(x) and (z) onlyD.(y) and (z) onlyE.(x) only

3. (a) California Bank holds $375 million in deposits and maintains a reserve ratio of 5%. Show the T-account of the bank

Money Multiplier =

Final Money Supply =

(b) If First Bank has deposits = $500,000, reserves = $100,000, and loans = $400,000. Show the T-account of the bank:

If the Fed requires banks to hold 5% as reserves:
Required Reserves =

Excess Reserves =

Final Money Supply =

(c) If First Bank decides to decrease its reserves to the required amount. Show the new T-Account of the bank.

Final Money Supply =

(d) The banking system has $100 billion of reserves, none of which are excess. People hold only deposits and no currency, and the reserve requirement is 40%. Show the T-Account of the banks.

Final Money Supply =

5. Suppose you win the lottery. You have a choice between earning $100,000 fora year for 20 years or an immediate payment of $1,200,000. If the interest rate is 3%:

(a) Which choice would you make?

(b) For what range of interest rates should you take the immediate payment?

Q2:

Starting at the equilibrium point called “A” of Demand for money curve (DM) and Supply of money (MS1). Now suppose Bank of Canada increases money supply to MS2, and the value of money and price level adjust to bring supply and demand for money into a new equilibrium point called “B”. EXPLAIN CAREFULLY THE ADJUSTMENT PROCESS OR WHY THE ECONOMY MOVES FROM point “A” to point “B”?     

1. Answer one of the following questions about the statement of cash flows.

   b. What two methods are used to prepare it? Identify similarities and differences between them.

2. Identify and explain the adjustment from net income to obtain cash flows from operating activities using the indirect method for one of the following items.

   b. Nonoperating gains and losses.

How to establish an appropriate and thoughtfully staffed supply chain structure?

supply chain managment

Other things being equal, what usually would happen to bond prices and interest rates(YTM) when the economy slips into a recession (Analyze using s graph. Plot the demand and supply of the bond in initial state (A) and add the new equilibrium (B)) [ Hint: the case here is the opposite of the business cycle expansion.]