chap13 (9.) what are the main powers and responsibilities of the federal reserve system?what are its two mandates and some of its other goals?
10. what are subprime mortgages and what role did they play in the financial crisis of 2008?
Ch14 ( 6). (Money Creation) Show how each of the following would initially affect a bank’s assets andliabilities.a. Someone makes a $10,000 deposit into a checking account- It will increase liabilities.b. A bank makes a loan of $1,000 by establishing a checking account for $1,000). Increase assetsand liabilities.c. The loan described in part (b) is spent – It will decrease assets and liabilities.d. A bank must write off a loan because the borrower defaults- It will decrease assets andliabilities.
9. Suppose the money supply is currently $500 billion and the Fed wishes toincrease it by $100 billion.a. Given a required reserve ratio of 0.25, what should it do?The Fed need to lower the reserve requirements, which will provide banks with more fundsto lend and less to hold in reserve. b. If it decided to change the money supply by changing the required reserve ratio, what changeshould it make? Why may the Fed be reluctant to change the reserve requirement?The Fed should decrease the required reserve ratio. However, changes to the reserverequirement may disrupt the banking system.
2. Market Interest Rate) With a diagram, show how the supply of money and the demandfor money determine the rate of interest? Explain the shapes of the supply curve and the demand curve
9. (Money Supply Versus Interest Rate Target) Assume that the economy’s real GDP is growing.a. What will happen to money demand over time? If the GDP is growing. The money demandwill increase.b.If the Fed leaves the money supply unchanged, what will happen to the interest rateovertime? Interest rates should remain unchanged.c.If the Fed changes the money supply to match the change in money demand, what willhappen to the interest rate over time? An increase in the money supply lowers the interestrate, while a decrease increase the interest rate.d.What would be the effect of the policy described in part (c) on the economy’s stabilityover the business cycle? If the Fed increases the money supply, eventually consumerspending will increase. However, the spending will result in price level increase.
Please number as it is so i can now which goes where. do not forget to answer A. B. questions and label them as well.
only six questions