ECON 1102 Week 8 post lecture

Bank reserves increase which allows banks to lend

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bank reserves increase, which allows banks to lend more and, ultimately, increases the money supply B. bank reserves decrease, which reduces the amount banks can lend, thereby reducing the growth of the money supply C. bank reserves are unchanged D. bank reserves decrease, which increases the amount banks can lend, thereby increasing the growth of the money supply
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RECAP WEEK 7: The money supply in Econland is 1000, and currency held by the public equals bank reserves. The desired reserve-deposit ratio is 0.25. Bank reserves equal: A. 200 B. 250 C. 400 D. 800
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RECAP WEEK 7: The money supply in Econland is 1000, and currency held by the public equals bank reserves. The desired reserve-deposit ratio is 0.25. Bank reserves equal: A. 200 Money Supply = Currency held + Bank reserves by public desired reserve- deposit ratio $1000 = X + X 25 % B. 250 C. 400 D. 800
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RECAP WEEK 7 : According to the quantity equation, if velocity and real GDP are constant and the Reserve Bank increases the money supply by 5%, then the price level: A. decreases by 10% B. decreases by 5% C. is also constant D. increases by 5%
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RECAP WEEK 7 : According to the quantity equation, if velocity and real GDP are constant and the Reserve Bank increases the money supply by 5%, then the price level: A. decreases by 10% B. decreases by 5% C. is also constant D. increases by 5%
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The action buying and selling bonds is known as Open Market Operations (OMO). Open market operations provide a means by which the RBA can influence the overall level of cash (exchange settlement funds). They also provide the means by which the RBA is able to ensure the overnight cash rate is equal to its target rate. 19
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RECAP WEEK 7: Suppose the overnight cash rate is above the Reserve Bank's target. The Reserve Bank should respond by: A. increasing its purchase of financial assets, putting the exchange settlement accounts into a deficit position that contracts lending on the overnight market B. increasing its purchase of financial assets, putting the exchange settlement accounts into a surplus position that expands lending on the overnight market C. decreasing its purchase of financial assets, putting the exchange settlement accounts into a deficit position that contracts lending on the overnight market D. decreasing its purchase of financial assets, putting the exchange settlement accounts into a surplus position that expands lending on the overnight market
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RECAP WEEK 7: Suppose the overnight cash rate is above the Reserve Bank's target. The Reserve Bank should respond by: A. increasing its purchase of financial assets, putting the exchange settlement accounts into a deficit position that contracts lending on the overnight market B. increasing its purchase of financial assets, putting the exchange settlement accounts into a surplus position that expands lending on the overnight market C. decreasing its purchase of financial assets, putting the exchange settlement accounts into a deficit position that contracts lending on the overnight market D. decreasing its purchase of financial assets, putting the exchange settlement accounts into a surplus position that expands lending on the overnight market
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1.
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