How the fed manipulates the federal funds rate

Assignment Help Econometrics
Reference no: EM13181081

Reserve requirement for banks is set at 5%. Your firm withdraws $42,000 on its line of credit at the Security Bank to purchase equipment for expansion. The equipment vendor deposits the amount that he receives from you at his bank, The Highland Bank.   By how much has each bank's excess reserves changed as a result of your withdrawal and expenditure?   What is the maximum amount of new money that can be created in the banking system as a result of your purchase? Show all work.  Suppose that the Security Bank discovers its reserves will temporarily fall slightly short of those legally required. How might it remedy this situation through the Federal Funds market?   Explain how the Fed manipulates the Federal Funds Rate in order to achieve macroeconomic objectives

Reference no: EM13181081

Questions Cloud

Small refracting spy glass telescope : A small refracting spy glass telescope has an objective lens with a diameter of 2 inches. The world's largest refracting telescope at yerkes observatory has an objective lens with a diameter of 40 inches
Calculate the work done in moving the object : Calculate the work done in moving the object from x = 1 ft to x = 12 ft. (round your answer to two decimal places).
What is the velocity of the stone on impact : A stone thrown upward from the top of a 80 ft cliff at 118 ft/sec eventually falls to the beach below. (For this problem take the acceleration due to gravity to be -32 ft/sec; take upwards to be a positive direction.)
How do occupational priorities vary with age : How do people view work? How do you view work? How do occupational priorities vary with age? Considering our current economic condition in this country, how do people go about choosing a job without compromising their career choices or passion?
How the fed manipulates the federal funds rate : Reserve requirement for banks is set at 5%. Your firm withdraws $42,000 on its line of credit at the Security Bank to purchase equipment for expansion. The equipment vendor deposits the amount that he receives from you at his bank, The Highland Ba..
Presume the velocity of the water remains constant : A vertical force of 7 N (in the negative z direction) is required to hold the deflector in place. Determine the mass (kg) of the deflector. Assume the velocity of the water remains constant.
State keq to calculate the scn- concentration : Use the mean value that you determined for Keq to calculate the SCN- concentration in a solution Fe3+ concentration was 4.00 X10-2M and initial SCN- concentration was 1.00 X10-3 M. Is all of theSCN- in the form ofFeNCS2+?
Theories about how attitudes are formed : Choose two of the theories about how attitudes are formed and in 2 pages compare and contrast the two theories. Outline the components of each theory and discuss how they differ; provide examples of each theory and what you believe to the positive an..
Compare the alternatives at the marr : UPS Freight plans to spend $100 million on new long-haul tractor-trailers. Some of these vehicles will include a new shelving design with adjustable shelves to transport irregularly sized freight that requires special handling during loading and u..

Reviews

Write a Review

Econometrics Questions & Answers

  Explanation of multiple regression

A company's marketing dept. obtained information from 10 of the firm's outlets. The information consists of the qty. and price of the products sold at each outlet from the distribution center.

  Construct a table to report the regressions

Construct a table to report the regressions above, which includes the estimates, the standard errors, and adjusted R-square and find the estimated coefficient of ln(Y earsSchool) in Regression B. What is the interpretation of it?

  Question about the regression results

Wilpen Corporation, a price setting company, manufactures nearly 80% of all tennis balls purchased in the US. Wilpen estimates the US demand for its tennis balls by using the following linear specification:

  Explain steady rate

Matt Christpher is a 25 year old mechanical engineering and his salary next year will be $60,000.Matt expects that his salary will increase at a steady rate of 5%per year until his retirement at age 65.

  What are the burdens of the public debt

Many people advocate taxing "the rich" to alleviate the debt problem but the truth is that taxes will have to be increased on all income earners. What macroeconomic impacts would you expect to see if taxes are raised "across the board"?

  How the reserve bank of australia has dealt with crisis

"Financial crises, such as the recent ‘sub-prime' credit crisis, have significant disruptive effects on the flow of funds in the financial system". With the aid of examples, show how the Reserve Bank of Australia has dealt with the 2008 Global Fin..

  Computing regression lines and coefficient of squares

Computing regression lines, coefficient of squares, graphing dependent and independent variables using square footage vs home sales.

  What is the economic cost of tim attending the concert

The ticket cost Dave $600. To attend the concert Tim will have to take 3 days off from work where his daily compensation is $250. In addition Tim expects travel expenses to be $175 and the cost of a hotel for 2 days to be $275. What is the economi..

  How to apply central limit theorem

In a population Y=100 and Y=43. Use the central limit theorem to answer the following questions a. In a random sample of size n=100, find P(Y or = 98).

  Define cardinal utility functions

If two people have cardinal utility functions, person1 is Utility = XY and person2 is Utility = (XY)^1/3 which bundle would they find to be best Bundle 1: Has an indifference curve of Y = 1/X

  What is the per plant and total level of pollution abatement

The mayor considers engaging in direct quantity regulation (also called "command- and-control") and declares that each firm must engage in 42.5 units of pollution abate- ment. If the plants are controlled by the same firm, would it be socially optima..

  What are the second cycle changes in spending

Suppose that investment demand increases by $100. Assume that households have a marginal propensity to consume of 80 percent. Compute the first three rounds of multiplier effects as follows: a) What are the first cycle changes in spending? Total cu..

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