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Hello, please help me with this (the drop arrows and blank boxes), I continue to them it incorrect. o. The reserve requirementr open market operations,
Hello, please help me with this (the drop arrows and blank boxes), I continue to them it incorrect.
o. The reserve requirementr open market operations, and the moneysuppry Consider a hanking system where the Federal Reserve uses required reserves to control the money supply. (This was the case in the 0.5. prior to 2005.; 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 totai reserves of $300. Determine the money mul plierand the money supply for each reserve requirement listed in the Following tahte. Reserve Requirement Money supply (percent) simple Money Multiplier (Dollars) 20 v v 10 v v A higher reserve requirement is associated with a v money supply. Suppnse the Federal Reserve wants to increase the money supply by $200. Again, you can assume that banks do not hold excess relish/E and that warth nf households do not hold currency. If the reserve requirement is 10%, the Fed will use openrrnarlret operations to v U .5. government bonds. Now, suppose that, rather than immediately lending out all excess reserves, banks hegin holding some excess reserves due to uncertain economic conditions. Specifically, banks increase the percentage ordeposits held as reserves From 10% to 25% this increase in the reserve ratio causes the money multiplier to v to v . Under these conditions, the Fed would need to v worth of U5. government bands in order to increase the money supply by $200. which oi the following statements help to explain why, in the real world, the Fed cannot precisely control the money supply? Check all that apply. [3 The Fed cannot control whether and to what extent banks hold excess reserves. D The Fed cannot control the amount at money that households choose to hold as currency. [3 The Fed cannot prevent banks from lending out required reserves. I. Clio as far the drug arrow as are I: Inows: Ding]; 20 (Person) . simple Money Multiplier choices are. 1, or 2, or 5, or 10, or 20. 20 (Pucmt) . Money Supply (Dollars) choices are: $00, or 600, or 1,500, or 3,000,1rr 5,000 Dmll: 10 (Percent) . simple Money Multiplier choices are 1, or 2, or 5, or 10, or 20 10 (Percent) . Money Supply (Dollars) choices are: 300, or 600, or 1,500, or 3,000, or 6,000 Dropgl: A higher reserve remnrernent is associatedwith a (Choices are: larger, or smaller) money supply Dml: Lfthe reserve requirement is 10%, the Fed will tee opmdnzuket operations to: (Choices arr: buy, or sell) to Blank Money Box: worth of us. government hoods. DmS: This inuease in the reserve mu'n muses [he muney multiplitx m: (Chaim: are: rise M fall) to Choirs "2:1, 0:2 5, 0r 4, or 5, or 10). bm: Under these conditions, the Fed would need to: (Choices are: buy, or sell) Blank Money Box: north ufU.S government bonds in order to increase the rnoney soppty by 3200. Which ofthe renewing statements hc1p to explain Why, in the real world, the Fed cannot precisely control the money supp1y7 Check ailthnt app1y. The Fed cannot contro1 nrhethe and to what :xlmi banks hold excess reserves The Fed cannot control the arnotnit of money that households choose to ho1d as cunmcy. The Fed cannot prevent hanlrs trout landing not required reservesStep by Step Solution
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