Here is the complete question:
Suppose the Fed decides to buy bonds and New Hampshire Colonial Bank decides to sell $10 million worth of bonds. What will New Hampshire Colonial Bank most likely be able to do?
Answer:
Make new loans totaling about $10 million.
Explanation:
Purchasing bonds is a form of monetary policy that the Feds used to control the money supply.
When the Feds bought bonds from the New Hemisphere colonial banks, the New Hampshire Colonial Banks will acknowledge it as 'loan' , since the full payment from the bonds will not be received until several months or years into the future.
In return, New Hampshire Colonial Banks will be profited from interest revenue from the bonds, along with additional money supply that they can use to provide investments for citizens who want to borrow money to open their businesses. Stimulating the economy at the same time.
Latin, the answer would be A
Question: The fiscal deficit of the country Zoldova has been increasing at an alarming rate for the last decade. One of the major reasons for the worsening fiscal deficit has been indiscriminate government spending which had to be financed by printing more currency. The continuous increase in money supply to finance wasteful government expenditure caused the inflation rate to hit triple digits. With rising instability in the country, the central bank had to redenominate its currency earlier this year. As a result, currency worth 10,000 Zoldovan dollars last year are now worth only 100 Zoldovan dollars. Which of the following is most strongly implied by the information given in the question?
A. Zoldova's GDP reached an all-time low this year.
B. The ability of the Zoldovan dollar to function as a store of value has declined.
C. Personal income tax rates in this country are very low.
D. This is the first time the country has experienced hyperinflation.
E. Generous salaries and perks to government officials accounted for a substantial portion of government spending.
Answer: The ability of the Zoldovan dollar to function as a store of value has declined.
Fiscal deficit is the difference between the total revenue and the total expenditure of a government. It is usually known as the total borrowing needed for a budget to be implemented.
As a result of Zoldovan increasing fiscal deficit, the value of their currency has decreased.
In a unitary state, the central government holds all the power. A federal system has a mix of national and state or local governments. A confederacy is a loose relationship among a number of smaller political units. The vast majority of political power rests with the local governments.
