Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Please help me do the following questions 1. Write down T-Accounts for the Central Bank, a commercial bank, and the public. Place the following items

Please help me do the following questions

image text in transcribedimage text in transcribed
1. Write down T-Accounts for the Central Bank, a commercial bank, and the public. Place the following items in the appropriate places in the three accounts. D demand deposits T time deposits L loans from cb to public R cb reserves in the CB Curr currency in circulation GS1 govt bonds held by CB GS2 govt bonds held by cb GS3 govt bonds held by public FEl foreign exchange held by CB FE3 foreign exchange held by public CB cb public GSI R + R+ D+ D+ FEI Currency L T GSZ GS3 Totere FE 3. 2. Suppose the Central Bank sells $100 worth of foreign exchange to a business person who has an account in a commercial bank. Show where the $100 would appear in all three of the T- Accounts above. Use + and - to show changes.3. Draw the graph of the foreign exchange market for the United States. The dollar is the domestic currency and the pound sterling is the foreign currency. LABEL YOUR AXES. Draw the export earnings curve and import expenditure curve. Let the intersection take place at an exchange rate of $6 per pound sterling. Assume for the moment there are no capital flows. 4. Now suppose the gold values of the two currencies are such that the exchange rate is $5 per pound. Draw a horizontal line representing the fixed exchange rate. Does it lie above or below the intersection of the two curves? Is the United States gaining or losing gold? 5. A capital inflow to the United State would cause the (demand/supply) curve to shift to the (right/left). Circle the correct answers

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Managerial Economics A Problem-Solving Approach

Authors: Luke M. Froeb, Brain T. Mccann

2nd Edition

B00BTM8FK0

More Books

Students also viewed these Economics questions