The answer is selling Treasury bills, which decreases bank
reserves. The government securities that are used in open
market processes are Treasury bills, notes or bonds. If the FOMC needs
to grow the money supply in the economy it will acquire securities. On the
other hand, if the FOMC wants to decrease the money supply, it
will vend its securities.
Answer:
D2
Explanation:
Since Natasha displays some competence and has low commitment to her job,he falls into D2 category.The leadership style that needs to be used is Coaching to motivate Natasha and get the things done.
Answer:
Option (B) is correct.
Explanation:
Open market operations is a monetary policy instrument that is used by the Federal reserve for controlling the money supply in an economy. If there is a need to decrease the money supply in an economy then fed sells the government securities to the public and on the other hand if there is a need to increase the money supply in an economy then fed purchases the government securities from the public.
So, here the expansionary policy is to purchases the treasury bills from the public.
Answer:
$800
$1,000
The quantity of money demanded decreases as the interest rate rises.
Explanation:
a
To calculate the opportunity cost on government bond at 8%, we use the following method
Opportunity Cost for 8% interest rate on Government Bonds
= (8/100)%× $10,000
= 0.08% ×$10,000
= $800
To calculate the opportunity cost government at bond on 10%, we use the following method
Opportunity Cost for 10% interest rate on Government Bonds
= (10/100)%× $10,000
= 0.1%×$10,000
= $1,000
b. The quantity of money demanded decreases as the interest rate rises.
