Fed need to increase or decrease the supply of federal funds

Assignment Help Business Economics
Reference no: EM131160598

Suppose that the demand for federal funds curve is such that the quantity of funds demanded changes by $160 billion for each 1 percent change in the federal funds interest rate. Also, assume that the current federal funds rate is at the 3 percent rate that is targeted by the Fed. Now suppose that the Fed retargets the rate to 4.5 percent.

Instructions: Enter your answer as a positive value.

a. Assuming no change in demand, will the Fed need to increase or decrease the supply of federal funds?

b. By how much will the quantity of federal funds have to change for the equilibrium to occur at the new target rate?

by $ billion.

Reference no: EM131160598

Questions Cloud

How would you rearrange the letters in the words : Give the correct answer for each of the following problems: How would you rearrange the letters in the words new door to make one word? (Note: There is only one correct answer.)
Estimating spring constant of a spring using linear model : Each engineer computes a 95% confidence interval for the length of the spring under a load of 2.5 lb. Which interval is most likely to be the shortest? Which interval is most likely to be the longest?
About the growing demand on the part of investors : The management of Clean Corporation is concerned about the growing demand on the part of investors and the public in general for environmental disclosures in annual reports. In your opinion are environmental disclosures in company annual reports nece..
Different strategies of change for organizations today : There are many different strategies of change for organizations today. Reflect upon the strategies that are available to organizations and decide on one you feel would be the best choice. Explain the reasons you chose this strategy and why you fee..
Fed need to increase or decrease the supply of federal funds : Suppose that the demand for federal funds curve is such that the quantity of funds demanded changes by $160 billion for each 1 percent change in the federal funds interest rate. Also, assume that the current federal funds rate is at the 3 percent rat..
Craft a five to six pages paper on artificial intelligence : craft a 5-6 page paper on Artificial Intelligence. This will be the normal paper description unless you are directed to provide a longer or shorter paper for a particular assignment.
Electronics industry than another : Is there one location in Kenya that is more suitable for the electronics industry than another?
Find a 95% confidence interval for the difference : Find a 95% confidence interval for the difference in the proportions of units that meet the specification be- tween units with gold wire and those with aluminum wire.
Marketers shape consumer wants : 1. Respond in an attached Word document to the adage "People don't know what they want--they only want what they know." 2. Respond to what extent to which they they think marketers shape consumer wants.

Reviews

Write a Review

Business Economics Questions & Answers

  Which technology is cheapest for each level of output

Suppose the firm is operation in a high-way country, where capital cost is $100 per unit per day and labor cost is $80 per workers per day. which technology is cheapest for each level of output.

  Include indifference curves that is consistent

A also the new allocation B. Include indifference curves that is consistent with this trade being optimal for both Michael also Tony.

  Opponents of free trade often argue

Opponents of free trade often argue that trade with other countries destroys domestic jobs; it threatens industries that are vital to national security; it inhibits the chances of a new domestic industry from surviving; and that it is only desirable ..

  Fixed or floating exchange rates

Some remedies and preventive measures have been put forth to slow or forestall currency crises, such as capital controls and intermediate regimes (i.e., fixed or floating exchange rates). Discuss these measures and comment on whether they would be ef..

  How might tax incidence differ in the short and long run

In a market with free entry and exit, who bears the burden of a tax? Given this fact, how might tax incidence differ in the short and long run? [HINT: Recall how the market supply curve looks like when there is free entry and exit]

  Higher than the canadian inflation rate

If the inflation rate in the United States rises to a point that it is higher than the Canadian inflation rate, all else equal, predict the impact on: 1. the U.S. demand for Canadian dollars? 2. the supply of Canadian dollars? 3. the equilibrium valu..

  What is community policing

What is community policing? How does it differ from traditional policing? Does community policing offer an opportunity to improve policing services in the United States? Why or why not?

  The alternative approach towards economic production

According to the alternative approach (heterodox) towards economic production the only real scarce factor is time. Money, being a credit/debit relationship, cannot, by definition, be scarce. Nor are capital or resources scarce but reproducible.1 This..

  Using the data front calculating growth rates

Using the data front Calculating growth Rates

  Describe possible economic and non-economic factors

There are wide differences across countries in the share of health resources spent on drugs. Describe possible economic and non-economic factors that may contribute to the variation.

  A two-stock portfolio will always have a lower standard

If portfolios are formed by randomly selecting stocks, a 10-stock portfolio will always have a lower beta than a one-stock portfolio.

  What are the most important religious themes

What are the most important religious themes and people that Islam, Judaism, and Christianity have in common? Describe and discuss issues of current concern for Muslims around the world, and the relationship between various schools of Muslim thought.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd