the Federal Reserve buys s50 million in Treasury bills from commercial banik. bi
ID: 1128082 • Letter: T
Question
the Federal Reserve buys s50 million in Treasury bills from commercial banik. bills from commercial banks 6. Suppose rte reserve ratio is 10%, the monetary supply might eventually. A) increase; $500 million B) increase; $450 million C) decrease; $450 million D) decrease; $500 million by- Use the following to answer question 7: Table: Investment Projects Project Rate of return on investment Cost of invest ment 18 16 14 12 10 $ 500 300 1,000 200 2,000 1.500 1,200 800 (Table: Investment Projects) According to the table Investment Projects, if the market interest rate is 1 fund equal: A) $800. B) $1,000. 7· %, the sum of the cost of all projects that investors would choose to C) $2,000. D) $4,000. Use the following to answer question 8: Table: Balance of Payment Exports of goods and services Imports of goods and services Income receipts from abroad Income receipts to foreigners S1,425 billion 1,800 billion 420 billion 400 billiorn TransfersExplanation / Answer
Q6
Answer
option A
The money supply increase because the buy will give money to banks.
The increase=amount/reserve ratio
=50/.1=500 million
Q7
ANswer
The all project ROR above 11% are chosen and the sum is
=500+300+1000+200+2000
=4000
option D
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