Ask Question, Ask an Expert

+61-413 786 465

info@mywordsolution.com

Ask Microeconomics Expert

Economics


Home >> Microeconomics

4. Use the balance sheets to analyze the effects of open market operations.
(a) Suppose a central bank bought a $10,000 bond from a commercial bank, and to finish this transaction, the central bank put a credit of $10,000 into the commercial bank's account with the central bank in exchange for bonds. What changes happen to the central bank's balance sheet? What changes happen to the commercial bank's balance sheet?
(b) Suppose a central bank bought a $10,000 bond from the public (any nonbank), and that nonbank seller of bonds keeps the proceeds as cash. What happens to the central bank's balance sheet? What happens to the nonbank's balance sheet?

Microeconomics, Economics

  • Category:- Microeconomics
  • Reference No.:- M91228584

Have any Question?


Related Questions in Microeconomics

Question suppose that one giant bank the haumongous bank of

Question: Suppose that one giant bank, the Haumongous Bank of America,held all the checking deposits of all the people, subject to a 10 percent legal reserve requirement. If Reserve increased by $1 billion, could the Hum ...

Question only a small number of employment arrangements are

Question: Only a small number of employment arrangements are governed by (relatively) complete contracts. One such area is professional sports, where a player's contract requires, among other things, that he show up for ...

Quesiton suppose the dollar is overvalued by 20 and the

Quesiton: Suppose the dollar is overvalued by 20% and the Secretary of the Treasury announces that he hopes it will soon return to equilibrium. How would this announcement affect your sales if you were in the following b ...

Question some critics of discretionary monetary policies

Question: Some critics of discretionary monetary policies used by central banks suggest that there are lag problems in the timing of monetary policy, and there are problems with time inconsistencies, credibility and comm ...

Question mary has forgotten to put rental expenses on the

Question: Mary has forgotten to put rental expenses on the budget statement this month. Comment on the appropriateness of her action under each of the following scenarios: i) Mary owns the shop , Mary budgets a rental ex ...

Question in the wall street journal article included in

Question: In the Wall Street Journal article included in this week's lesson, what change in the small drugstore chain's product differentiation strategy has helped lift profitability? What has been responsible for the su ...

Question 1- how did the political reaction to government

Question: 1- How did the political reaction to government funding for the Solana project differ from the reaction to more conventional government spending projects such as roads and schools? What does the case tell us ab ...

Question a suppose the uncovered interest parity condition

Question: a) Suppose the uncovered interest parity condition holds, and that the domestic interest rate is lower than the foreign interest rate. What does this imply about the current versus future expected currency valu ...

Question if your receive 500 in simple interest on a loan

Question: If your receive $500 in simple interest on a loan that you made for $10,000 for 5 years, what was the interest rate you charged? The response must be typed, single spaced, must be in times new roman font (size ...

Question econommic question please help1 describe the

Question: Econommic question, please help 1. Describe the evolution of the concept of international development and discuss the critiques against 'development'--or specifically modernization theory--from a dependency per ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Why might a bank avoid the use of interest rate swaps even

Why might a bank avoid the use of interest rate swaps, even when the institution is exposed to significant interest rate

Describe the difference between zero coupon bonds and

Describe the difference between zero coupon bonds and coupon bonds. Under what conditions will a coupon bond sell at a p

Compute the present value of an annuity of 880 per year

Compute the present value of an annuity of $ 880 per year for 16 years, given a discount rate of 6 percent per annum. As

Compute the present value of an 1150 payment made in ten

Compute the present value of an $1,150 payment made in ten years when the discount rate is 12 percent. (Do not round int

Compute the present value of an annuity of 699 per year

Compute the present value of an annuity of $ 699 per year for 19 years, given a discount rate of 6 percent per annum. As

Follow Us

© Copyright 2013-14 mywordsolution.com All rights reserved