macro

posted by .

what would happen to the money supply if the federal reserve made an open market sale of 5 million worth of gov't securities to a private citizen? assume that the bank with which this private citizen does business with is all loaned up, has reserves of 20 million dollars, deposits of 100 million dollars and must follow a required reserve policy of 20%

A "Bernadette" posted (almost) this same question on Sunday, Oct 15. See my response.

Respond to this Question

First Name
School Subject
Your Answer

Similar Questions

  1. macroeconomics

    can anyone help with this question? What would happen to the money supply if the federal reserve made an open market sale of 5 billion worth of government securities to a private citizen. Assume that the bank with which the private
  2. the federal reserve

    How does the Federeal Reserve control the amount of money in circulation?
  3. economics

    Federal Reserve lowers reserve requirment to 1.25% what wil happen to the bank lending, supply of money, aggregrate demand and the interest rate and why?
  4. economics

    Assume that the reserve requirement is 20%. Also assume that banks do not hold excess reserves and there is no cash held by the public. The Federal Reserve decides that it wants to expand the money supply by $40 million. a. If the …
  5. Macroeconomics

    If it looks like a bank won't meet the Federal Reserve Bank's reserve requirement, normally it will first turn to the: A) other member banks and borrow at the federal funds rate. B) Fed and borrow at the discount rate. C) open market …
  6. Economic Help please

    1)What happen to the net public debt if the federal government operates next year with a: 1) Budget deficit?
  7. Principal of Finance

    The following information is available to you: travelers' checks = $1 million; coin and paper currency = $30 million; repurchase agreeĀ¬ ments and Eurodollars = $15 million; demand deposits = $25 million; retail money market mutual …
  8. Economics

    Unemployment is on the rise though inflation is quite low. Gross Domestic Product is rising but more slowly than the goal rate. The Federal Reserve may buy government securities in open market operations in order to A. increase the …
  9. FIN 100

    P5: The following information is available to you: travelersā€™ checks = $1 million; coin and paper currency = $30 million; repurchase agreements and Eurodollars = $15 million; demand deposits = $25 million; retail money market mutual …
  10. finance

    A bank has currency and coins equal to $20 million in its vaults. It has securities worth $10 million, has borrowings equal to $5 million, and has given out loans equal to $2 million. It also has deposits with the Federal Reserve equal …

More Similar Questions