8. The reserve requirement, open market operations, and the moneysupply

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

(CHART GOES RIGHT HERE INSTEAD OF THE Bottom)

A higher reserve requirement is associated with a (smaller/ larger) money supply.

Suppose the Federal Reserve wants to increase the money supply by $200. Again, you can assume that banks do not hold excess reserves and that households do not hold currency. If the reserve requirement is 10%, the Fed will use open-market operations to (buy/SEll).   _______$ worth of U.S. government bonds.

Now, suppose that, rather than immediately lending out all excess reserves, banks begin holding some excess reserves due to uncertain economic conditions. Specifically, banks increase the percentage of deposits held as reserves from 10% to 25%. This increase in the reserve ratio causes the money multiplier to(FALL/RISE) to( 1, 2.5, 4,5,10) . Under these conditions, the Fed would need to (BUY/SELL)   _________ $ worth of U.S. government bonds in order to increase the money supply by $200.

Which of the following statements help to explain why, in the real world, the Fed cannot precisely control the money supply? Check all that apply.

-The Fed cannot control whether and to what extent banks hold excess reserves.

-The Fed cannot control the amount of money that households choose to hold as currency.

-The Fed cannot prevent banks from lending out required reserves.

what are some consequences of using community rating

What are the indicators of economic development, performance and potential. Give examples.

In detail discuss what the slutsky equation is and it's importance in consumer theory

Suppose there are 2 countries A and B. each country can produce two goods X and Y. each country has 100 work units allocated to the production of goods X and Y Lx + Ly = 100
export the production capacity curves (PPFa, PPFb) for countries A and B

250 to 350 words required

In understanding the process of the rapid transformation of economic systems in many nations in the world from the beginning of the 1990s, briefly explain why the freedom to choose the right theoretical foundations still do matter to develop an appropriate economic system for economic growth and better income distribution of a society

Assume that the following data characterize the hypothetical economy of Trance: money supply = $180 billion; quantity of money demanded for transactions = $140 billion; quantity of money demanded as an asset = $10 billion at 12 percent interest, increasing by $10 billion for each 2-percentage-point fall in the interest rate.

a. What is the equilibrium interest rate in Trance?

b. At the equilibrium interest rate, what are the quantity of money supplied, the total quantity of money demanded, the amount of money demanded transactions, and the amount of money demanded as an asset in Trance?

Quantity of Money Supplied= ______ Billion

Quantity of Money Demanded = _____ Billion

Amount of Money Demanded Transaction= ____ Billion

Amount of Money Demanded as an asset= ____ billion

1. Which of the following would cause the supply of steel to decrease?
   a) a decrease in price per unit of steel
   b) a decrease in the wage rate of steel workers
   c) an increase in the number of steel producers
   d) a decrease in the expected future price of steel by sellers
   e) none of the above is correct

Use the following supply and demand schedule for Questions 2-3:

           P                
           ========================
           $10       50       46
           15       49       47
           20       48       48
           25       47       49
           30       46       50
           35       45       51
           40       44       52

2. What is the equilibrium price of this product?

   a) $10
   b) $20
   c) $30
   d) $40
   e) none of the above is correct

3. Suppose the government imposes a price ceiling of $10 per unit. Accordingly,

   a) there would be a surplus of 4 units.
   b) 46 units of this good would be purchased.
   c) 50 units of this good would be purchased.
   d) both a) and c) are correct
   e) none of the above is correct

4. Assume that carrots are a normal good. If consumer income declines at the same time    that    production costs for carrots decrease, then the equilibrium price will _____ and the    equilibrium quantity will _____.

   a) increase; be indeterminate
   b) be indeterminate; decrease
   c) increase; increase
   d) decrease; decrease
   e) decrease; be indeterminate

5. Assume the same situation as in Question 4. This time, however, economists anticipate that    the demand effect will be smaller than the supply effect. Accordingly, the equilibrium       price of carrots will _____ and the equilibrium quantity will _____.

   a) decrease; increase
   b) be indeterminate; decrease
   c) increase; decrease
   d) decrease; decrease
   e) decrease; be indeterminate

Which individuals in the nation might gain from a tariff placed on imported textiles? Which might lose?

Review the below described Concentration strategies in the textbook. These are strategies that involve trying to successfully compete only within a single industry. There are three concentration strategies:

• Market penetration involves trying to gain additional share of a company’s existing markets using existing products. Often companies will rely on advertising to attract new customers with existing markets.
• Market development involves taking existing products and trying to sell them within new markets. One way to reach a new market is to enter a new retail channel or geographic areas.
• Product development involves creating new products to serve existing markets.

Select one of these and find an article that describes a company that has successfully used this strategy.   Identify the company and provide an analysis of what the company has done. Also, from your own learning from the class, assess what the company did to make this successful.

Consider the Bertrand duopoly model with differentiated products. Firm 1's demand function is q1 = 1/2-(P1-P2)/3, and Firm 2's demand function is q2 = 1/2 - (P2-P1)/3. Firms have identical marginal costs c>0. a) Derive firms' best replies and draw them. b) Compute the Bertrand equilibrium prices, quantities, and profits (show all the steps of the derivation)

Parts A and B contain hypothetical quotes by two unnamed politicians. Using information from this course/textbook, explain why each quote reflects faulty economic reasoning. (Each quote might contain parts that are at least partially true, but when combined, the overall statement is not true).

1. “If we limit the price of drug XYZ to one-third of its current level, we will be harming the very patients we claim to be helping. The company that produces XYZ spent millions of dollars developing and testing this drug, and will almost certainly stop producing it once the price ceiling is implemented.” (Note: assume that this drug is still protected by its patent).
2. “My opponent in Part A is nuts; the company will continue producing XYZ. No one will be hurt by this life-saving legislation, except for the company and its greedy managers and shareholders.” Hint: Can you identify another group of people (stakeholders) who might be hurt by this legislation?

1)Whether or not firms can pass higher costs that they incur on to consumers depends on _________.

Select the correct answer below:

a)elasticity

b)quantity demanded

c)price

d)quantity supplied

2)As additional increments of resources are added to a certain purpose, the _________ benefit will __________.

Select the correct answer below:

a)total; decline

b)total increase

c)marginal; decline

d)marginal; increase

3)The landlord of an apartment complex has raised rents by 30%. Which of the following will happen?

Select the two correct answers below.

Select all that apply:

• Immediately, many renters will vacate the units.

• In the immediate aftermath of the rent increase, rent revenue will rise sharply as most renters will pay the higher rent and remain in the units.

• In the long run, many renters will choose to move to lower priced apartments.

• Renters will refuse to pay the higher rent as it as unexpected.

A 750-word creative essay on how to close the financial gap to education and why access to higher education is important for all.

This is for Macro-Econ: I just need to double check my answers on item d. and item e.

1. What is the opportunity cost of increasing the annual output of potatoes from 600 to 800 pounds?

When increasing the annual output of potatoes from 600 to 800 pounds the country has to lose 200 pounds of fish because 500 pounds of fish – 300 pounds = 200 pounds. Therefore, 200 potatoes = 200 fish. The opportunity cost of potatoes with respect to fish is 200/200. So, opportunity cost of potato = 1 fish.

2. What is the opportunity cost of increasing the annual output of potatoes from 200 to 400 pounds?

When the output increases from 200 to 400 pounds of potatoes there is an increase of 200 pounds of potatoes and the country must sacrifice 50 units of fish (650-600=50). If the production of potatoes is to increase, then the production of fish should be decreased by 50 pounds.

c. What is the opportunity cost of increasing the annual output of potatoes from 200 to 400 pounds?

d. Can you explain why the answer to parts b and c are not the same?

e. What does this imply about the slope of production possibility frontier?