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suter [353]
1 year ago
14

When the federal reserve purchases a government bonds from banks, reserves in the banking system ________ and the monetary base

________, everything else held constant.
Business
1 answer:
Semmy [17]1 year ago
7 0

When the federal reserve buys government bonds from banks, the monetary base and banking system reserves <u>both increases</u> while keeping all other factors constant.

The Federal Reserve, sometimes known as the Fed, is the most influential economic organization in the United States and maybe the whole world. Its primary duties include controlling the money supply, determining interest rates, and overseeing the financial markets.

In exchange for monthly interest payments, a bondholder lends money to a business or the government for a predetermined period of time. When the bond matures, the bond's issuer pays the investor its money back.

The Fed will buy bonds from banks to increase the amount of cash available, which will provide funds to the banking sector. The Fed will remove capital from the banking system by selling bonds to banks in order to reduce the amount of money in circulation.

Learn more about Federal Reserve

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balandron [24]

Answer:

Explanation:

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7 0
4 years ago
When a round of downsizing forced Olivia's boss, Karen, to ask Olivia to absorb the responsibilities of the laid-off grant write
KIM [24]

Answer:

A

Explanation:

6 0
3 years ago
Cigarette smokers are very loyal buyers of cigarettes. Even if prices of cigarettes rise, they will typically continue to buy th
Amanda [17]

Answer:

a. mostly cigarette buyers.

Explanation:

The law of demand states an inverse relationship between quantity demanded of a good and it's price, keeping other factors affecting demand as constant.

Price elasticity of demand refers to the degree of responsiveness of quantity demanded to a change in price.

Alcohol and cigarettes are exceptions to the law of demand since in their case, the factor of addiction presides which outweighs rational decision making.

Thus, price elasticity of demand of cigarettes is inelastic. So a marginally higher price charged for cigarettes will not reduce their consumption.

A new tax on cigarettes would raise their prices. The manufacturers, to cover such taxes and maintain the same margin as before would further raise the prices of cigarettes further.

Thus, the tax burden would be shifted to the consumers and hence majorly borne by them.

3 0
3 years ago
You have a loan outstanding. It requires making six annual payments of $ 6 comma 000 each at the end of the next six years. Your
BlackZzzverrR [31]

Answer: The final payment would be: $42919,74.

Explanation: To simplify the work we must make a timeline:

0            1               2             3           4              5               6

        $6000      $6000     $6000    $6000    $6000       $6000

These would be the normal conditions of the loan.

but if instead of making the 6 payments only one is made at the end:

We must use the FV annuity formula:

6000 × \frac{(1+0,07)^{6} - 1 }{0,07} = <u>42919,74</u>

8 0
3 years ago
Graham receives $640,000 at his retirement. he invests x in a twenty-year annuityimmediate with annual payments and the remainin
Sauron [17]
<span>For the amount invested in the 20 year annuity immediate,

the return will be;
 r/(1 - (1+r)^-n) = 0.05/(1- 1.05^-20)
= 0.0802425872
= 8.02425872% 

Now, return on perpetuity-immediate = 5% 

So, 5% + </span>8.02425872% = 13.02425872<span>

for equal returns from both investments,
X = 5/(13.02425872) x 640,000

= $245,695.365 

= $ 245,695.36 </span>
6 0
3 years ago
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