Suppose Trust Bank has $500 million in assets and $400 million in liabilities. The Fed purchases $45 million in bonds from the bank. Which of the following is a likely consequence of the Fed's action?
a. An increase in the bond holdings of Trust Bank by $45 million and a decrease in the bank's reserves by $45 million
b. A decrease in both the bond holdings and reserves of Trust Bank by $45 million
c. An increase in both the bond holdings and reserves of Trust Bank by $45 million
d. A decrease in the bond holdings of Trust Bank by $45 million and an increase in the bank's reserves by $45 million
d
You might also like to view...
Which of the following would be of particular interest to a microeconomist?
a. The price of fruit the typical household consumes. b. The nation's inflation rate. c. The nation's rate of unemployment. d. The budget of the national government. e. The growth of the economy.
Countries that start with very little physical capital will get a:
A. higher return from adding a unit of capital than a country that starts at a higher initial level will. B. lower return from adding a unit of capital than a country that starts at a higher initial level will. C. similar return from adding a unit of capital than a country that starts at a higher initial level will. D. higher return from adding a unit of capital the more natural resources they possess.
Which of the following equations is always correct in an open economy?
a. I = Y - C b. I = S c. I = S - NCO d. I = S + NX
When a manager makes decision then looks for information to justify the decision, it is called
a. implicit favorite model b. bounded rationality model c. econological model d. none of the above