Indicate whether the following statement is true or false. Provide at least thre
ID: 2691491 • Letter: I
Question
Indicate whether the following statement is true or false. Provide at least three sentences of Explanations or calculation to support your answer. 3. When the Fed uses open market operations by purchasing Treasury securities from various financial institutions in the U.S., there will be and outward shift in the supply of schedule of loanable funds and a decrease in interest rate. When the Fed uses open market operations by selling some of its Treasury securities to investors in the U.S., there will be an inward shift in the supply schedule of loanable funds and an increase in interest rate. a. True b. False ExplanationExplanation / Answer
When the Fed uses open market operations by purchasing Treasury securities from various financial institutions in the U.S., there will be and outward shift in the supply of schedule of loanable funds and a decrease in interest rate. When the Fed uses open market operations by selling some of its Treasury securities to investors in the U.S., there will be an inward shift in the supply schedule of loanable funds and an increase in interest rate.
a. True
because The discount rate is the interest rate a Reserve Bank charges eligible financial institutions to borrow funds on a short-term basis, transactions known as borrowing at the “discount window.” Unlike open market operations,