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jeka94
2 years ago
15

If the fed sells $5 billion of u. S. Bonds in the open market and the reserve requirement is 5 percent, m1 will eventually:.

Business
1 answer:
olasank [31]2 years ago
8 0

If the fed sells $5 billion of u. S. Bonds in the open market and the reserve requirement is 5 percent, m1 will eventually decrease by $100 billion.

<h3>What is the effect of the sale of bonds on M1?</h3>

M1 is comprised of the most liquid money supply e.g. currency, demand deposits.  When the Fed sells bonds they are conducting a contractionary monetary policy. The aim of this policy is to reduce the supply of money in the economy.

Reduction in the value of money = value of bonds sold / reserve requirement

$5 billion /0.05 = $100 billion.

To learn more about monetary policy, please check: brainly.com/question/3817564

#SPJ1

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<h3>Where does raw poultry be stored?</h3>

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1 year ago
An economy consists of three workers, Larry, Moe, and Curly. Each works ten hours a day and can produce two services: mowing law
pantera1 [17]

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Larry spends half his time on each activity, while Moe only washes cars and Curly only mows lawns. Then lawns will be mowed and cars will be washed

Explanation:

In a hour :

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3 years ago
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<em>Here in this case the managers of Kendall’s Home Decorators are predicting the demand.</em>

<u><em>Therefore the correct option is (a)</em></u>

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I hope you helped^_^

<h3>Follow me for more answer</h3>
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