Answer Happy

1st attempt Part 1 (1 point) Assume that banks hold no excess reserves and that all currency is deposited into the banking system. If the required reserve ratio is 10.00 %, and the Federal Reserve wants to increase the money supply by $45.00 million, the Fed would need to make an open market purchase of $ million. (Insert your answer in millions, and round to two decimal places) See Hint Part 2 (1 point) Assume that banks hold no excess reserves and that all currency is deposited into the banking system. If the required reserve ratio is 10.00%, and the Federal Reserve wants to decrease the money supply by $75.00 million, the Fed would need to make an open market sale of $ million. (Insert your answer in millions, and round to two decimal places) See Hint

Part 3 (1 point) Suppose that banks decide to hold excess reserves. In order for the Federal Reserve to change the money supply by the same amounts as in parts 1 and 2, it would need to make Choose one: O A a larger open market purchase but a smaller open market sale. OB. a larger open market purchase and a larger open market sale. O C. a smaller open market purchase and a smaller open market sale. OD. a smaller open market purchase but a larger open market sale. See Hint

1st attempt Part 1 (1 point) The Federal Reserve buys $20.00 million in Treasury securities. If the required reserve ratio is 35.00 %, and all currency is deposited into the banking system, and banks hold excess reserves of 10% , then the maximum amount the money supply can increase is $ million. (Insert your answer in millions; if you think the answer is $30 million, just enter 30. Round your answer to two decimal places.) See Hint See Hint Part 2 (1 point) The Federal Reserve sells $40.00 million in Treasury securities. If the required reserve ratio is 25.00 %, and all currency is deposited into the banking system, and banks hold excess reserves of 10%, then the maximum amount the money supply can decrease is $ million. (Insert your answer in millions, and round your answer to two decimal places)

In late 2008, the Fed purchased $300 billion in long-term Treasury securities and $1.25 trillion in mortgage-backed securities. What was the name given to these types of purchases? Choose one: O A. reserve injections OB. quantitative easing O C. open market purchases OD. discount loans Part 2 (1 point) Which of the following tools does the Federal Reserve no longer use for monetary policy? Choose one or more: A reserve requirements B. discount rate DC. open market operations OD. federal funds rate See Hint ANSWER