Explain the likely effects on the money supply

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Reference no: EM132030371

Using the money supply (M1) model developed in class, explain the likely effects on the money supply of the following. Be sure your answer indicates what changes in the model.

a. the U.S. Treasury spends some of its account at the Fed

b. the Fed does an open market sale of bonds

c. banks lower the fees they had charged depositors each time a depositor uses a debit or credit card to buy goods or services

d. the Fed increases the interest rate it pays banks on reserves

e. banks borrow more from the Fed at the discount rate

Reference no: EM132030371

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