If the fed buys $1 million in government securities from bank a, then the immediate effect of this transaction is an increase in Bank A's excess reserves
The word bank has many meanings. Apart from things related to money such as savings banks and piggy banks, banks are also grass and dirt slopes such as riverbanks.
Banks, institutions that trade money and its substitutes and provide other money-related services. In their function as financial intermediaries, banks accept deposits and authorize loans.
Steal the key. A bank is a financial institution authorized to accept deposits and make loans. There are different types of banks such as retail banks, commercial banks, and investment banks. In most countries, banks are regulated by central governments or central banks.
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Answer: increase; increase by more than $100 million
Explanation:
If the government lowers tax rates and tax revenue falls by $100 million, we can expect consumption spending to increase and equilibrium output to increase by more than $100 million.
It should be noted that when there's reduction in tax rate, this implies that there'll be more money available to the households and the firms and this will then lead to more money which can be spent on goods or services. Also, due to this, the equilibrium output will increase as well by more than $100 million.
Answer:
b. expansionary fiscal or monetary policy will add significantly to real GDP will little effect on inflation.
Explanation:
The Keynesian aggregate supply curve is mostly horizontal (flat) because a decline in aggregate demand will always result in a decline in aggregate production (supply). In other words, during a recession, companies are willing to supply (produce and sell) all the products and services that their consumers demand at a given price. Even if the price does not change, if aggregate demand decreases, aggregate supply will also decrease.
That is why Keynesian economists argue that governments must intervene during economic recessions.
Answer:
My return will be 1.37% lower.
Explanation:
Total expenditure:
= Number of stocks×Number of times×Commission and spread per trade
= 10×5×$29
= $1,450
In % form:
= $1,450/$106,000
= 1.37%
My return will be 1.37% lower.
