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Dovator [93]
3 years ago
13

The Federal Reserve (or Fed) often executes its policy by selling or buying U.S. government securities in the open market, which

in turn influences the quantity of real money balances. (a) Show how the sale of U.S. government securities would be consistent with an increase in the interest rate on those securities. (b) How would the yield to maturity on other securities be affected
Business
1 answer:
dem82 [27]3 years ago
4 0

Answer:

a) When interest rates on U.S. government securities increases, then the Federal Reserve sells those securities in the open market in order to decrease the money supply. This is contractionary monetary policy of the Federal Reserve. As interest rates are indirectly affected by open market operations, the Federal Reserve sells securities on the open market to reduce the amount of money in circulation to combat rising inflation in the economy.

(b) The federal funds rate, the interest rates charged on the loans to individuals and firms and the rates of bank deposits will increase. As a result, the demand for bank deposits will increase and the demand for other debt securities will decrease. This in turn will increase the yield offered on these instruments.

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3 years ago
Below is the complete list of accounts of Sooner Company and the related balance at the end of April. All accounts have their no
allochka39001 [22]

Answer:

                                           Trial Balance

                                                     <u>Debit</u>               <u>Credit</u>

Land                                             53000

Accounts Receivable                  5400

Cash                                              3200

Prepaid Rent                                6700

Accounts Payable                                                 3600

Deferred revenue                                                  1950

Common Stock                                                      33000

Retained earnings                                                 21250

Service Revenue                                                   24700

Salaries expense                          7500

Supplies expense                       <u>  8700  </u>            <u>              </u>

Totals                                            84500               84500                    

Explanation:

The trial balance has been made in the answer section.

3 0
3 years ago
Doing a budget makes ____________________________ less likely.
ehidna [41]

Answer:

The answer is put is bankruptcy if there aren't any choices

8 0
3 years ago
A change in the dollar value of the British pound from​ $1.60 to​ $1.50 represents A. an increase in the pound price of British
hram777 [196]

Answer:

Option (B) is correct.

Explanation:

1 pound = $1.60

1 pound = $1.50

So, there is a depreciation in the value of pound relative to the dollar and appreciation in the value of dollar relative to the pound.

Now, suppose a resident of united states purchase some quantity of goods(say, 20 shirts) from the seller in United kingdom.

Price of each shirt = 2 pounds

Hence,

Before the change in exchange rate, then the buyer have to pay in dollars:

= 20 × (2 × $1.60)

= 20 × 3.2

= $64

After the change in exchange rate, then the buyer have to pay in dollars:

= 20 × (2 × $1.50)

= 20 × 3

= $60

Hence, the amount paid by the resident of united states reduced because of the fall in exchange rate. Now, they have to pay less for the same amount of commodities. This shows that there is an appreciation in the currency of US relative to UK.

4 0
3 years ago
A company orders office supplies in June. Those supplies are received and used in July. The supplies are paid for in August. In
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Answer:

Expense must be recognized in July

Explanation:

The reason is that the expense must be recognized in the month in which the supplies are used because the accrual concept says that the expenses must be realized when they are incurred. Incurred means that the consideration received has been used. For example if I pay the telecommunication network in June to give 4G internet and the services are delivered in the month July then the expenses will be realized in the month in which the services were used and that is July for internet facilities. So in this case the supplies are used in the month of July which is in-accordance with the accrual concept.

8 0
3 years ago
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