Please cap LUUIU the Fed use to control financial market? 2020/04/15 A central bank decides by ho al bank decides by how much an interest rate should be changed in order to restore equilibrium. at are the tools it uses to take such decisions? Facing the shocks from COVID-19, why does the FFR decrease to 0.25%? T money supply inconu die Suppose that the required reserve ratio is 9%, currency in circulation is $620 billion, the amount of checkable deposits is $950 billion, and excess reserves are $15 billion. Time Deposit are $120 billion. a. Calculate the money supply, the currency deposit ratio, the excess reserve ratio, and the money multiplier. b. Suppose the central bank conducts an unusually large open market purchase of bonds held by banks of $1,300 billion due to a sharp contraction in the economy. Assuming the ratios you calculated in part (a) remain the same, predict the effect on the money supply. Suppose the central bank conducts the same open market purchase as in part (b), except that banks choose to hold all of these proceeds as excess reserves rather than loan them out, due to fear of a financial crisis. Assuming that currency and deposits remain the same, what happens to the amount of excess reserves, the excess reserve ratio, the money supply, and the money multiplier? Following the financial crisis in 2008, the Federal Reserve began injecting the banking system f liquidity, and at the same time, very little lending occurred. As a result. October 2008 through 2011. How Please cap LUUIU the Fed use to control financial market? 2020/04/15 A central bank decides by ho al bank decides by how much an interest rate should be changed in order to restore equilibrium. at are the tools it uses to take such decisions? Facing the shocks from COVID-19, why does the FFR decrease to 0.25%? T money supply inconu die Suppose that the required reserve ratio is 9%, currency in circulation is $620 billion, the amount of checkable deposits is $950 billion, and excess reserves are $15 billion. Time Deposit are $120 billion. a. Calculate the money supply, the currency deposit ratio, the excess reserve ratio, and the money multiplier. b. Suppose the central bank conducts an unusually large open market purchase of bonds held by banks of $1,300 billion due to a sharp contraction in the economy. Assuming the ratios you calculated in part (a) remain the same, predict the effect on the money supply. Suppose the central bank conducts the same open market purchase as in part (b), except that banks choose to hold all of these proceeds as excess reserves rather than loan them out, due to fear of a financial crisis. Assuming that currency and deposits remain the same, what happens to the amount of excess reserves, the excess reserve ratio, the money supply, and the money multiplier? Following the financial crisis in 2008, the Federal Reserve began injecting the banking system f liquidity, and at the same time, very little lending occurred. As a result. October 2008 through 2011. How