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loris [4]
2 years ago
14

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

Business
1 answer:
expeople1 [14]2 years ago
8 0

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.

To learn more about Fed's Monetary Policy refer to:

brainly.com/question/14158316

#SPJ4

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Select the best answer for the question.
Lorico [155]

Answer:

QC

Explanation:

US dollar used to be backed by gold but this is not the case anymore. US dollar being as a flat currency is backed by governemnt through federal reserve.

6 0
3 years ago
describe a shopping good that you are someone you know purchase what kind of research did you are that person do before buying t
saveliy_v [14]
A shopping good that someone I know purchased is a dining set.The person conducted online research and compared the different options before settling on the item. The research was also mainly conducted on Google and Amazon. This involved reading peer reviews to decide the best product to purchase. <span> </span>
8 0
3 years ago
Carlisle Company has been cited and must invest in equipment to reduce stack emissions or face EPA fines of $18,500 per year. An
Ahat [919]

Answer:

equivalent annual cost: 19,784.81

The investment is not economically justified as it is cheaper to pay the fines than invest in the equipment to avoid them.

Explanation:

We calcualte the PMT of a 75,000 dollars equipment at 10%

PV \div \frac{1-(1+r)^{-time} }{rate} = C\\

PV 75,000

time 5

rate 0.1

75000 \div \frac{1-(1+0.1)^{-5} }{0.1} = C\\

C                 $ 19,784.811

EPA fines:    <u>   </u><u>$ 18,500.00  </u>

differential:          (1, 284.81)

3 0
3 years ago
Which type of portfolio might a young investor who is not afraid of risk choose?
Naddik [55]

The type of portfolio that the young investor who is not afraid of risk choose is the portfolio with a high percentage of stocks. Stocks are able to return higher compared to others and this makes it give a high risk because of its performance of providing losses or either profit. The answer is letter D.

7 0
3 years ago
Read 2 more answers
On May 15, 2000 you enter into a 1-year forward rate agreement (FRA) with a bank for the period starting November 15, 2000 to Ma
Artyom0805 [142]

Answer:

a.

3.51%

b.

0%

Explanation:

a.

First, we need to calculate the YTM of 6 months zero-coupon bond by using the following formula

Price = Face value / ( 1 + YTM )^numbers of years

96.79 = 100 / ( 1 + YTM )^1

1 + YTM = 100 / 96.79

1 + YTM = 1.0331646

Now calculate the YTM of 1 Year zero-coupon bond

93.51 = 100 / ( 1 + YTM )^1

YTM = 1.0331646 - 1

YTM = 0.0331646

YTM = 3.31646%

YTM = 3.316%

1 + YTM = 100 / 93.51

1 + YTM = 1.06940

YTM = 1.06940 - 1

YTM = 0.06940

YTM = 6.940%

YTM = 6.94%

Hence the forward rate is calculated as follow

Forward rate = [ (1 + YTM of 1 year zero coupon bond ) / ( 1 + YTM of 6 months year zero coupon bond ) ] - 1 = ( 1 + 6.94% ) / ( 1 + 3.316% ) = [ 1.0694 / 1.03316 ] - 1 = 1.03508 - 1 = 0.03508 = 3.508% = 3.51%

b.

At the time of inception the formward rate is 0.

7 0
3 years ago
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