Question
1. A person takes $4,000 in cash and places it into a checking account in a bank. Does the composition of the money supply change?
1.A person takes $4,000 in cash and places it into a checking account in a bank. Does the composition of the money supply change? Does the size of the money supply change? Explain your answers.
2.Look up the following interest rates: discount rate, prime interest rate, the federal funds rate, credit card interest rate for late payments or cash advances and a loan from a payday or title loan store. What conclusions can you draw from the size of the interest rate. How does credit worthiness affect the price of money you might pay for a home mortgage or a car?
3.What are the differences between the Fed and the U.S. Treasury? Identify the major responsibilities of the Federal Reserve System.
4) What are three tools of monetary control and how are they used? In recent years overnight repurchase agreements (bank repo and reverse repo operations) have been used as a tool of monetary control. How is this tool different from open market operations? Source material may be found online at the New York Fed to assist with this question.
https://www.newyorkfed.org/markets/domestic-market-operations/monetary-policy-implementation/repo-reverse-repo-agreements
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started