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P11-5. Calculate the bank discount rate (DR) attached to a 60-day, $1 million CD selling in the secondary market for $990,000.

March 8
SQ 12-1. What functions do central banks perform in a market-oriented economy? Explain why each function is important in the functioning of a market-oriented economic system.

SQ 12-2. What are the principal goals central banks pursue in order to carry out monetary policy?

SQ 12-12. What is the Federal Reserve's primary job (that is, its principal role or function)?

SQ 13-1. Why are open market operations increasingly the most popular monetary policy tool? What are the principal effects of open market operations on the financial system?

SQ 13-8. What is moral suasion? Do you believe this tool can be effective?

P 13-2. Suppose the banking system's nonborrowed reserves total $48.3 billion, with total legal reserves standing at $51.2 billion. What must borrowed reserves be? This morning the Federal Reserve decided to undertake the sale of $500 million in government securities through open market operations. What will be the new level of nonborrowed reserves? If interest rates do not change, what will be the new level of total reserves? What must you assume to make this calculation? If interest rates do change, which way are they likely to move?

 

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