20. The interest rate the Fed charges on loans it makes to banks is called a, th
ID: 1114619 • Letter: 2
Question
20. The interest rate the Fed charges on loans it makes to banks is called a, the prime rate. b. the federal funds rate. the discount rate. d. the LIBOR. 21 As the reserve ratio increases, the money multiplier a. increases. b. does not change could do any of the above. 22. Which list ranks assets from most to least liquid? a. currency, fine art, stocks 6 currency, stocks, fine art fine art, currency, stocks fine art, stocks, currency 23. The Federal Funds rate is the interest rate e Federal Reserves charges for loans it makes to the federal government. b the Federal Reserve charges banks for short-term loans. d. on newly issued one-year Treasury bonds anks charge each other for short-term loans of reserves. 4. Given the following information, what would be the values of M1 and M2? $650 billion Na M2 $300 billion Small time deposits Demand Deposits and other Checkable Deposits Savings-type deposits Money market mutual funds Travelers' checks Large time deposits Currency Miscellaneous Categories in M2 $750 billion Wa $600 billion Mo $25 billion 1 $600 billion $100 billion M S25 billion MI $400 billion, M2 $2,475 billion. Ma-M +1naJ MI-S425 billion, M2 : $3.025 billion. MI-S425 billion, M2-32, 450 billion. $425 billion, M2 $1,875 billion. Mi Suppose that banks desire to hold no excess reserves and that the Fed has set a reserve requirement of 10%. If you deposit $3,000 into First Hawkeye Bank, a. Hawkeye's required reserves increase by $300. b. Hawkeye will be able to lend out $2,700. c. Hawkeye's assets and liabilities will both increase by $3,000. . All of the above are correct.Explanation / Answer
20. The discount rate is the rate at which the Federal bank charges to the other banks.
OPTION C
21. As the reserve ratio increases, the money multiplier decreases because people tend to spend less when interest rates increases which leads to the lower money supply.
OPTION C
22. Currency happens to be the most liquid asset. Then the stocks and then the fine art.
OPTION B
23. The Federal Funds rate is the interest rate at which one financial institution lends to another financial institution overnight.
OPTION C
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.