You are watching: How do investment banks differ from commercial banks? (mark all that apply.)
Suppose the economic climate is in equilibrium in the initially duration at point A. In the second period, the economic situation reaches allude B. What plan would certainly the Fed likely go after in order to relocate ADVERTISEMENT 2 to AD Subscript 2 comma plan and also reach equilibrium (point C) in the second period? (What policy will certainly increase the price level and rise actual real GDP?)A.Open sector purchase of federal government securitiesB.Increase the reserve requirementC.Decrease taxesD.Increase the discount rate
The Fed buys and also sells bondsbuys and also sells bonds as a component of its plan to reach every one of the following objectives except:A.Stability of financial sectors and establishments.B.Price stability.C.High unemployment.D.Economic development.
The number to the best illustrates the economic situation making use of the Dynamic Aggregate Demand and Aggregate Supply ModelIf actual genuine GDP in 2006 occurs at point B and also potential GDP occurs at LRAS 06 we would suppose the Federal Reserve Bank to pursue________________ monetary plan.Actual actual GDP-----Potential actual GDP-----Price level-----Unemployment-----
a contractionaryActual - decreasespotential - does not changeprice level- decreasesjoblessness - increases
In the figure to the appropriate, as soon as the money supply enhanced from MS 1 to MS 2,the equilibrium interest rate dropped from 4% to 3%. Why?A.Increased demand also for Treasury securities drives down their interest rate.B.At first, firms organize more money than they desire loved one to various other financial assets.C.Increased demand also for Treasury securities drives up their prices.D.All of the over.
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In the number to the right, the economy experiences inflation in the second duration. What would certainly be the Fed"s reactivity if actual real GDP occurs at allude B and also potential GDP occurs at LRAS 2?
As the figure to the right shows, the Fed can impact both the money supply and also interemainder prices. However, in recent years, the Fed targets interest rates in financial policy more often than it does the money supply. Which interest price does the Fed target?A.The momentary real interest rateB.The federal funds rateC.The discount rateD.The long-term nominal interest rate
The figure to the appropriate illustrates a dynamic AD-AS modelSuppose the economy is in equilibrium in the initially period at point A. In the second duration, the economic climate reaches allude B.We would certainly suppose the Fed to seek what form of plan in order to relocate ADVERTISEMENT 2 to AD Submanuscript 2 comma policy and also reach equilibrium (point C) in the second period?-----If the Federal Reserve Bank"s policy is effective, what is the effect on the following macroeconomic indicators?Actual real GDP:-----Potential real GDP:-----Price level:-----Unemployment:-----
expansionary monetary policyActual real GDP: increasePotential real GDP:does not changePrice level: increaseUnemployment: decrease
How execute investment financial institutions differ from commercial banks? (Mark all that apply.)A.Investment financial institutions mostly perform not lend to households.B.Commercial banks are financial advisors to firms issuing stocks.C.Investment financial institutions take deposits.D.Investment banks do not take deposits.E.Commercial financial institutions perform not lend to households.