I8S-ECON103 Verion I 44. The sale of existing U.S. Treasury securities by the Fe
ID: 1132377 • Letter: I
Question
I8S-ECON103 Verion I 44. The sale of existing U.S. Treasury securities by the Federal Reserve will a. decrease the amount of U.S. Treasury securities held at banks b. increase the reserves at banks. c. increase the money supply d. decrease the money supply e. have no effect on the money supply. 45. If Carlos decides to deposit $100 in cash into his savings accoumt at the bank, how would this be reflected on the bank's balance sheet? a. b. c. Reserves and deposits would decrease by the same amount as the deposit. Reserves and deposits would increase by the same amount as the deposit. This activity would not be recorded on a bank's balance sheet. Reserves would decrease and deposits would increase by the same amount as the deposit. Reserves would increase and deposits would decrease by the same amount as the deposit. d. e. 46 A government might want to reduce aggregate demand if it believes that the economy is a producing below full-employment output b. expanding past its long-run capabilities. c. above the natural rate of unemployment. d. in a recession. e. in long-run equilibrium. 47. In 2010, real gross domestic product (GDP) n the United States was roughly S14.6 trillion. In 2011, real GDP in the United States was roughly S1S.1 trillion. Thus, between 2010 and 2011, real GDP grew by a. 4.3 percent. b. 4.5 percent. c. 3.3 percent. d. 0.5 percent. e. 3.4 percent. 48. The supply of loanable funds increases while the demand for loanable funds remains constant. This would the equilibrium interest rate to increase, but the equilibrium quantity of loanable funds would remain unchanged. the equilibrium interest rate to increase, leading to a new lower equilibrium quantity. both the equilibrium quantity of loanable funds and the equilibrium interest rate to a. b c. d. the equilibrium quantity of loanable funds to increase and the equilibrium interest rate e. the equilibrium quantity of loanable funds to decrease and the equilibrium interest rate to decrease. to increase. 49. When U.S. goods become more expensive relative to foreign goods, exports willand imports a. b. c. decrease; decrease increase; increase decrease; be unaffected d. decrease; increase e. increase; decrease Page 9 /11Explanation / Answer
44) Solution: will decrease the money supply
Explanation: The sale of existing U.S. Treasury securities by the Federal Reserve will result in reduction of money supply
45) Solution: Reserves and deposits would increase by the same amount as the deposit
Explanation: With a deposit $100 in cash into his saving account the reserves as well as deposits would rise by the same amount as the deposit
46) Solution: is expanding past its long-run capabilities
Explanation: When government intends to expand its long-run capabilities it targets to decrease the aggregate demand
47) Solution: 3.4%
Explanation: 0.5 / 14.6 * 100 = 3.4%
48) Solution: the equilibrium quantity of loanable funds to increase and the equilibrium interest rate to decrease
Explanation: An increase in supply of loanable fund will increase the equilibrium quantity and reduces the equilibrium interest rate