(MB)? An increase in which of the following increases the Monetary Base discount
ID: 1127178 • Letter: #
Question
(MB)? An increase in which of the following increases the Monetary Base discount and advances. 6) a. b. Treasury deposits at the Fed c. Treasury cash holding. d. Other liabilities of the Fed. 7) Which of the following factors does not positively impact the Monetary Base? a. Discount & advances. b. Foreign central banks deposits at the Fed. c. Portfolio of government bonds held by the Fed d. all of the above positively impact the base. 8) The Fed's Float is: a. Cash Items in the process of collection+Gold certificates. b. Controlled by the Fed fully c. due to check clearings by the Fed. d. the same as the Fed's equity capital 9) Suppose the Fed buys $2m government bonds from the banking industry. After the money creation process is completed, the M1 money (k = 0.3, r-10%, and e = 5%): a. Expands by $2m. b. Contracts by $4.25m. c. Expands by 5.78. d. Expands by 8.46. 10. Regarding "The Road to Hell," operating targets of the Fed are located: A. at the beginning of that road. B. at the end of that road. C. after the intermediate targets on that road. D. before the intermediate targets on that road. 11·"The Road to Hell" best describes the Fed's a. control over the monetary base. b. altruistic nature. c. monetary tools & targets in that knowing what the Fed does is not the same as knowing how the Fed does it. d. monetary tools & targets in that knowing what the Fed does is the same as knowing how the Fed does it. 12·The Federal Open Market Committee's directives are issued to: a. the Advisory committee. b. the secretary of Treasury. c. the president of the Fed bank of Chicago.Explanation / Answer
6. B. Treasury Deposits at the Fed
Explanation: The monetary base consists of the deposits held by the Fed and the coins and currencies held by individuals and businesses. When deposits with the Fed increases, the monetary base increases.
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