Question

In: Economics

44. "Private" bank money includes a. Federal Reserve Notes. b. reserves held at the Fed. c....

44. "Private" bank money includes

a. Federal Reserve Notes.

b. reserves held at the Fed.

c. demand deposits at commercial/retail banks.

d. FDIC insurance limits.

Solutions

Expert Solution

44. C

c. demand deposits at commercial/retail banks.

It is the money create by lending and borrowing by private Bank. Other item is out of stock of private bank. Reserve held at federal Bank restrict the private money FDIC insurance limit is not a private bank money as is does not have any financial value. Federal reserve note is the money of Central Government.

Rahul Sunny answered 1 year ago
Next > < Previous

Related Solutions

The US Federal Reserve Bank (FED) is considering tightening the money supply now. The United States...
The US Federal Reserve Bank (FED) is considering tightening the money supply now. The United States has an open macro-economy including exports and imports, a market for foreign currency (exchange rates are the price in this market), and international capital mobility. If the FED does restrict the money supply, it will affect investment as it would in a closed economy. But now, adjustments in the foreign currency market occur that induce further changes in aggregate Supply and Demand. Summarize the...
The Federal Reserve (the Fed) is the central bank of the United States with the power...
The Federal Reserve (the Fed) is the central bank of the United States with the power to create money. When the Fed decides to increase the money supply by creating more money, how do they go about doing this? What role do banks play in this process? Where does the money come from to pay for all their purchases?
How has paying interest on reserves held at the Fed affected the following: money multiplier, lending...
How has paying interest on reserves held at the Fed affected the following: money multiplier, lending and the money supply? Bear in mind we are dealing with a number of different platforms here, so think through your answer.
If the Federal Reserve increases the interest rate on bank deposits at the Fed, banks will...
If the Federal Reserve increases the interest rate on bank deposits at the Fed, banks will want to hold Select one: a. fewer reserves, so the reserve ratio will rise. b. more reserves, so the reserve ratio will rise. c. fewer reserves, so the reserve ratio will fall. d. more reserves, so the reserve ratio will fall.
The federal reserve system, also known simply as the fed, is the central bank of the...
The federal reserve system, also known simply as the fed, is the central bank of the united states. the fed has several important functions such as supplying the economy with currency, holding deposits of banks, lending money to banks, regulating the money supply, and supervising the banking system. explain how the federal reserve and the banking system creates money (i.e., increases the supply of money). is this an inherently inflationary practice? explain the factors that affect the demand for money.
The federal reserve system, also known simply as the fed, is the central bank of the...
The federal reserve system, also known simply as the fed, is the central bank of the united states. the fed has several important functions such as supplying the economy with currency, holding deposits of banks, lending money to banks, regulating the money supply, and supervising the banking system. explain how the federal reserve and the banking system creates money (i.e., increases the supply of money). is this an inherently inflationary practice? explain the factors that affect the demand for money.
The federal reserve system, also known simply as the fed, is the central bank of the...
The federal reserve system, also known simply as the fed, is the central bank of the united states. the fed has several important functions such as supplying the economy with currency, holding deposits of banks, lending money to banks, regulating the money supply, and supervising the banking system. explain how the federal reserve and the banking system creates money (i.e., increases the supply of money). is this an inherently inflationary practice? explain the factors that affect the demand for money.
The Federal Reserve (or ‘Fed’) is the central bank in the USA, set up in 1913....
The Federal Reserve (or ‘Fed’) is the central bank in the USA, set up in 1913. Although it consists of 12 regional Federal Reserve Banks, it is the Federal Reserve Board in Washington that sets monetary policy and the Federal Open Market Committee (FOMC) that decides how to carry it out. In what ways is the Fed’s operation of monetary policy similar to and different from Bank Negara Malaysia?
The following table shows the initial balance sheets of Bank A and The Federal Reserve (Fed)....
The following table shows the initial balance sheets of Bank A and The Federal Reserve (Fed). Suppose that the Fed then buys $10 million in bonds from Bank A. a.) What are total assets and total liabilities for Bank A after the transaction? Write down the new balance sheet for Bank A. b.) Excess reserves are reserves that banks hold beyond what they are required to hold to meet their reserve requirement. Assume that the reserve ratio is 10%. What...
The following table shows the initial balance sheets of Bank A and The Federal Reserve (Fed)....
The following table shows the initial balance sheets of Bank A and The Federal Reserve (Fed). Suppose that the Fed then buys $10 million in bonds from Bank A. Bank A Assets Liabilities Bonds: $100 million Deposits: $90 million Reserves: $20 million Shareholders' equity: $30 million Total assets: $120 million Total liabilities: $120 million The Fed Assets Liabilities Treasury bonds: $400 million Reserves: $500 million Other bonds: $400 million Currency: $300 million Total assets: $800 million Total Liabilities: $800 million...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT