26. Ifreserve requirement percentages are unchanged, but the dollr Imts of cach

Question

26. Ifreserve requirement percentages are unchanged, but the dollr Imts of cach reserve tranche are increased,the weignted average reserve requirement will: a. increase decrease c. stay the same d. impossible to determine REC RES 27. Which monetary policy move best describes what is happening in the graph above? a. OM sale that decreases eq. in. b. res (change in reserve interest rate) that has no effect on the eq. in. res that increases eq. in. d. OM purchase that increases eq. in. e. OM purchase that reduces eq. in. PES RES RES 28. Which monetary policy move best describes what is happening in the graph above? a. d (change in discount rate) that decreases eq. ir. b. Arr (change in reserve requirement) that has no effect on the eq.in. C. rr that increases eq. iff d. OM sale that decreases eq. i. e OM purchase that decreases eq. in. .

Explanation / Answer

26. b. decrease

As RRP is unchanged, the dollar limit of each reserve, will lead to a decrease in the weighted average reserve requirement.

27. c. ires that increase eq. iff

From the graph, it is clearly seen change in Ires that increase the iff equilibrium

28.e. OM purchase that decrease eq. iff

From the graph, the dcrease in eq. iff caused by purchasing OM. otherwise, OM sale increases iff equilibrium.

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