5 if the fed buys government bonds to the public we

Info icon This preview shows page 17. Sign up to view the full content.

View Full Document Right Arrow Icon
5. If the Fed buys government bonds to the public , we would anticipate a(n): a. _______________ in commercial bank demand deposits b. _______________ in commercial bank reserves c. _______________ in credit availability in the economy (more excess reserves) d. _______________ in the money supply e. _______________ in interest rates f. _______________ in bond prices If interest rates change as indicated in (e), the anticipated impact on the economy would be to: g. _______________ investment spending (I G ), and through the multiplier effect h. _______________ aggregate demand and real GDP If the Fed buys government bonds from the public , we would anticipate: i. _______________ in the size of the money multiplier j. _______________ in the size of the federal government’s debt 6. Both the Federal Reserve Banks and commercial banks buy and sell government securities, but for substantially different objectives . a. The Federal Reserve Banks buy and sell government securities to: b. Commercial banks buy and sell government securities to improve their liquidity (or having sufficient reserves on hand) and to: c. T F An open-market operation occurs when the public buys or sells government bonds.
Image of page 17
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern