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2 years ago

If the Fed buys U.S. government securities from banks, the federal funds rate and banks' reserves .

1 answer:

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If the Fed buys U.S. government securities from banks, the federal funds rate falls and banks' reserves increase.

<h3>Fed's Monetary Policy</h3>

Price stability and full employment, the Federal Reserve's two legally mandated goals, are necessary to ensure a healthy and expanding economy in the United States.
In the past, the Fed has achieved this via modifying reserve requirements, conducting open market operations (OMO), and influencing short-term interest rates.
By acquiring government assets, the Fed helps to boost bank reserves and bring down the federal funds rate. Government securities will be sold by the Fed on the open market.
The Fed reduces the amount of money in circulation by selling government assets, which raises the federal funds rate.
OMO has an impact on interest rates as well because when the Fed purchases bonds, prices are pushed up and rates are lowered; conversely, when the Fed sells bonds, prices are pushed down and rates are raised.

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Corporation began with retained earnings of million. Revenues during the year were million, and expenses totaled million. decla

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Complete Question:

Cell One Corporation began 2018 with retained earnings of $ 260 million. Revenues during the year were $ 520 million, and expenses totaled $ 340 million. Cell One declared dividends of $ 61 million. What was the company's ending balance of retained earnings? To answer this question, prepare Cell One's statement of retained earnings for the year ended December 31, 2018, complete with its proper heading.

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Cell Corporation

Statement of Retained Earnings for the year ended December 31, 2018:

$'million

Retained Earnings, Dec. 31, 2017 260

Net Income 180

Dividends (61)

Retained Earnings, Dec. 31, 2018 379

Explanation:

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Expenses totaled $ 340 million

Net Income (Revenue - Expenses) $180 million

Cell One declared dividends of $ 61 million

b) Cell Corporation's Retained Earnings for the year ended December 31, 2018 is the difference between the beginning retained earnings, net income, and the amount of dividend declared during the current year. This figure gives the amount of equity that has been retained for growing the business, which is an important internal source of corporate funding.

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3 years ago

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Variable cost $18 $18 $18

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If the Fed buys U.S. government securities from banks, the federal funds rate ________ and banks' reserves ________.

If the Fed buys U.S. government securities from banks, the federal funds rate and banks' reserves .