125.If the total amount of demand deposits in the country increases by $12,000 after the Fed purchases $6,000 in bonds, what is the required reserve ratio?a.0.4b.0.1c.0.2d.0.5e.0.3ANS:D

PTS:1DIF:Difficulty: ModerateNAT:BUSPROG: AnalyticSTA:DISC: Monetary and fiscal policyTOP:The Fed and the Money SupplyKEY:Bloom's: Comprehension126.If the Federal Reserve wishes to increase the money supply by $30,000 and the reserve requirement ratio is 0.4, how big a purchase of bonds will the Fed need to make?

PTS:1DIF:Difficulty: ChallengingNAT:BUSPROG: AnalyticSTA:DISC: Monetary and fiscal policyTOP:The Fed and the Money SupplyKEY:Bloom's: Analysis127.If the Federal Reserve buys $1,000 in bonds and the reserve requirement ratio is 0.5, what happens to the money supply and the net worth of all banks?

PTS:1DIF:Difficulty: ModerateNAT:BUSPROG: AnalyticSTA:DISC: Monetary and fiscal policyTOP:The Fed and the Money SupplyKEY:Bloom's: Analysis128.What is the range of the required reserve ratio?

PTS:1DIF:Difficulty: EasyNAT:BUSPROG: AnalyticSTA:DISC: Monetary and fiscal policyTOP:The Fed and the Money SupplyKEY:Bloom's: Knowledge

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129.The formula for the demand deposit multiplier isa.1 divided by excess reservesb.1 divided by the required reserve ratioc.1 minus the required reserve ratiod.the required reserve ratio minus 1e.the required reserve ratio times the level of demand depositsANS:B

PTS:1DIF:Difficulty: ModerateNAT:BUSPROG: AnalyticSTA:DISC: Monetary and fiscal policyTOP:The Fed and the Money SupplyKEY:Bloom's: Knowledge130.If the required reserve ratio is 0.2, the demand deposit multiplier is

PTS:1DIF:Difficulty: ModerateNAT:BUSPROG: AnalyticSTA:DISC: Monetary and fiscal policyTOP:The Fed and the Money SupplyKEY:Bloom's: Comprehension131.The Fed has decreased the money supply. The formula for calculating the resulting change in demand deposits is

PTS:1DIF:Difficulty: ModerateNAT:BUSPROG: AnalyticSTA:DISC: Monetary and fiscal policyTOP:The Fed and the Money SupplyKEY:Bloom's: Knowledge