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C719
Module 11
Question | Answer |
---|---|
For a bank: Loans to public & Reserves | Assets |
For a bank: Deposits & Loans from Fed | Liabilities |
The fraction of deposits that banks hold as reserves | Required Reserves |
The fraction of deposits that a bank can lend out | Excess Reserves |
When incomes rise, the interest rate will... | Rise |
When the price level falls, the interest rate will... | Fall |
When the supply of money increases, the interest rate will... | Fall |
When the supply of money decreases, the interest rate will... | Rise |
The interest rate banks charge each other. | Federal Funds Rate |
The interest rate the Fed charges banks. | Discount Rate |
Main tool of the Federal Reserve | Open Market Operations |
When the Fed buys securities, the money supply... | Increases |
When the Fed sells securities, the money supply... | Decreases |
Treasury bonds are an example of... | Securities |
When the Fed lowers the required reserve ratio, the money supply... | Increases |
When the Fed raises the required reserve ratio, the money supply... | Decreases |
When the Fed lowers the discount rate, the money supply... | Increases |
When the Fed raises the discount rate, the money supply... | Decreases |