Answer the next question on the basis of the following consolidated balance sheet of the commercial banking system. Assume that the reserve requirement is 10%. All figures are in billions.Assets (billions of dollars)Liabilities & Net Worth (billions of dollars)Reserves$60Checkable deposits$600Securities140Stock shares260Loans260 Property400 Suppose the Fed wants to increase the money supply by $400 billion to drive down interest rates and stimulate the economy. Assuming that the money multiplier is operating to full effect, to accomplish the desired increase, the Fed could ________.
A. sell $40 billion of U.S. securities to the banks
B. sell $20 billion of U.S. securities to the banks
C. buy $20 billion of U.S. securities from the banks
D. buy $40 billion of U.S. securities from the banks
Answer: D
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In Germany the three largest banks or Grossbanken are
A) commercial banks. B) savings banks. C) cooperative banks. D) specialized banks.
Why must the spot price equal the futures price on the settlement date?
What will be an ideal response?
An explanation for why the short-run aggregate supply curve is upward-sloping is because:
a. nominal incomes are fixed. b. the quantity of real output supplied is inversely related to the aggregate supply curve. c. an increase in price will increase the supply of money. d. the capital-output ratio.
In 1973 and 1979, the U.S. federal government imposed price ceilings on gasoline which resulted in surpluses of gasoline
Indicate whether the statement is true or false