Principles of Economics 2e
2nd Edition
ISBN: 9781947172364
Author: Steven A. Greenlaw; David Shapiro
Publisher: OpenStax
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Textbook Question
Chapter 28, Problem 17RQ
Name and briefly describe the responsibilities of each of the following agencies: FDIC, NCUA, and OCC.
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Chapter 28 Solutions
Principles of Economics 2e
Ch. 28 - Why is it important for the members of the Board...Ch. 28 - Given the danger of bank runs, why do banks not...Ch. 28 - Bank runs are often described as self-fulfilling...Ch. 28 - If the central bank sells 500 in bonds to a bank...Ch. 28 - What would be the effect of increasing the banks...Ch. 28 - Why does contractionary monetary policy cause...Ch. 28 - Why does expansionary monetary policy causes...Ch. 28 - Why might banks want to hold excess reserves in...Ch. 28 - Why might the velocity of money change...Ch. 28 - How is a central bank different from a typical...
Ch. 28 - List the three traditional tools that a central...Ch. 28 - How is bank regulation linked to the conduct of...Ch. 28 - What is a bank run?Ch. 28 - In a program of deposit insurance as it is...Ch. 28 - In government programs of bank supervision, what...Ch. 28 - What is the lender of last resort?Ch. 28 - Name and briefly describe the responsibilities of...Ch. 28 - Explain how to use an open market operation to...Ch. 28 - Explain how to use the reserve requirement to...Ch. 28 - Explain how to use the discount rate to expand the...Ch. 28 - How do the expansionary and contractionary...Ch. 28 - How do tight and loose monetary policy affect...Ch. 28 - How do expansionary, tight, contractionary, and...Ch. 28 - Which kind of monetary policy would you expect in...Ch. 28 - Explain how to use quantitative easing to...Ch. 28 - Which kind of monetary policy would you expect in...Ch. 28 - How might each of the following factors complicate...Ch. 28 - Define the velocity of the moneyCh. 28 - What is the basic quantity equation of money?Ch. 28 - How does a monetary policy of inflation target...Ch. 28 - Why do presidents typically reappoint Chairs of...Ch. 28 - In what ways might monetary policy be superior to...Ch. 28 - The term moral hazard describes increases in risky...Ch. 28 - Explain what would happen if banks were notified...Ch. 28 - A well-known economic model called the Phillips...Ch. 28 - How does rule-based monetary policy differ from...Ch. 28 - Is it preferable for central banks to primarily...Ch. 28 - Suppose the Fed conducts an open market purchase...Ch. 28 - Suppose the Fed conducts an open market sale by...Ch. 28 - All other things being equal, by how much will...Ch. 28 - Suppose now that economists expect the velocity of...Ch. 28 - If GDP is 1,500 and the money supply is 400, what...Ch. 28 - If GDP now rises to 1,600, but the money supply...Ch. 28 - If GDP now falls back to 1,500 and the money...
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- Notes and coins issued by a central bank arearrow_forwardThe table below provides data for a hypothetical economy. Total value of corporate shares Currency outside chartered banks Chequable notice deposits at chartered banks Publicly held demand deposits at chartered banks Federal government bonds Other liquid assets included in M2+ Nonpersonal term and foreign-currency deposits at chartered banks Personal term deposits at chartered banks Non-chequable notice deposits at chartered banks Chequable notice deposits at near banks Personal term deposits at near banks Non-chequable notice deposits at near banks $500 billion $32 billion $92 billion $35 billion $627 billion $22 billion $258 billion $124 billion $84 billion $79 billion $104 billion $64 billion Based on this data: a. M1+ is $ billion b. M2 is $ billion. c. M3 is $ billion. d. M2+ is $ billion.arrow_forwardWhat are the primary functions of a central bank? providing banking services to businesses and consumers conducting monetary policy ensuring the stability of the financial system conducting fiscal policy providing banking services to commercial banks, depository institutions, and the federal governmentarrow_forward
- International Gold Standard (19th century): If different countries fix the price of their currencies e in terms of gold this immediately implies that e are fixed. If the Central Bank of two countries stand ready to buy and sell gold at a fixed price in terms of their respective domestic currencies, then there is only one value of e that eliminates the possibility of arbitrage. Suppose that S100 buys 1 ounce of gold and 100 pounds buys lounce of gold. Under fixed exchange rates, this implies that IS buys Ipound. Explains what would happen (arbitrageurs' action and result) if instead e-1S buys 2 poundsarrow_forwardDifferentiate between monetary flow and real flowarrow_forwardFederal Reserve & Open Market Operations If the Fed shifts to a more restrictive monetary policy, and it utilizes the open market operations tool, describe what will happen to each of the following: net exports the prices of stocks real GDParrow_forward
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- The central bank of the United States of America is called U.S. Treasury First National Bank The Federal Reserve The European Central Bankarrow_forwardIn the following data table, calculate the amount of excess reserves and the monetary base and then use the table to answer the questions that follow. Category Currency, C Deposits, D Reserves, R Required Reserves, RR Excess Reserves Monetary Base Value (Billions of Dollars) 700.00 500.00 31.00 23.00 $8 $731 0.06 0.02 Use the previous data table to fill in 16.13 sing cells in the following table. (Hint: Round to the nearest hundredth.) Ratio Currency Ratio, k Required Reserves Ratio, r Excess Reserves Ratio, l'ex Money Supply Multiplier, MsM 1.4 0.05 16.13 Based on your answers to the previous questions, the money supply isarrow_forwardThe Money Supply: Small Time Deposits (less than $100,000) Demand Deposits and other Checkable Deposits Savings Deposits Money Market Accounts for individuals: Money Market Checking Accounts = $15 billion Money Market Savings & Investment Accounts = $10 billion Money Market Mutual Funds' Accounts (less than $100,000) Currency Large Dollar Accounts (over $100,000): Money market mutual funds for individuals, businesses, governments $650 billion $300 billion $445 billion. $645 billion. $325 billion. $880 billion. $750 billion $25 billion $600 billion $130 billion $100 trillion MZM (money-with-zero-maturity) measures the value of the money supply in circulation for households and businesses to immediately buy goods and services. Given the above listed financial data, MZM calculates to: services. Given the above listed financial data, MZMarrow_forward
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