HomeworkLib
Question

12. When the Treasury sells a security to a security dealer: a. increase the national debt b. decrease the national debt c. i
business   accounting   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1
When the treasury sells security to security dealer it is collecting funds from security dealer and at the same time undertaking an obligation to pay debts in future.
When future debts are payable it will ineffect result in reduction of reserves available for future. Therefore, answer to the question is
(f) - both (a) and (d)
i.e. it increases the national debt and also reduces reserves for banking system.
0 0
Add a comment
Know the answer?
Add Answer to:
12. When the Treasury sells a security to a security dealer: a. increase the national debt...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • When a primary dealer sells a government bond to the Federal Reserve, reserves in the banking...

    When a primary dealer sells a government bond to the Federal Reserve, reserves in the banking system ________ and the monetary base ________, everything else held constant. increase; decreases increase; increases decrease; decreases decrease; increases

  • A when-issued Treasury security involves a. An on-the-run security’s going off the run b. A forward...

    A when-issued Treasury security involves a. An on-the-run security’s going off the run b. A forward contract in which a dealer promises to deliver a new Treasury security once it is issued c. The Treasury’s promising to award a security to a noncompetitive bidder d. The Treasury’s promising to award a security to a competitive bidder Helping to stimulate investor interest in Treasury securities is a. Regular auctions of Treasury securities b. Transparent and fair auctions c. All winning bids...

  • 4- When the Fed conducts open-market sales, a. it sells Treasury securities, which decreases the money...

    4- When the Fed conducts open-market sales, a. it sells Treasury securities, which decreases the money supply. b. it lends money to member banks, which decreases the money supply. c. it borrows from member banks, which increases the money supply. d. it sells Treasury securities, which increases the money supply. 5-  When the government levies a $100 million tax on people's income and puts the $100 million back into the economy in the form of a spending program such as new...

  • Suppose that JPMorgan Chase sells $300 million in Treasury bills to the Fed. a. Use T-accounts...

    Suppose that JPMorgan Chase sells $300 million in Treasury bills to the Fed. a. Use T-accounts to show the immediate impact of this sale on the balance sheets of JPMorgan Chase and the Fed. (Enter your responses as integers. Include a minus sign to indicate a negative change, but do not include a plus sign for a positive change.) JP Morgan Chase Bank Assets Liabilities Securities million Reserves million Federal Reserve Assets Liabilities Securities million Reserves million b. Suppose that...

  • 10.) Which of the following is an example of an automatic stabilizer? A. The reduction in...

    10.) Which of the following is an example of an automatic stabilizer? A. The reduction in the money supply that occurs as banks become less willing to make loans during a recession B. The reduction in real wages that occurs as the economy goes into a recession C. The increase in government spending that occurs as the result of new spending bills passed by Congress D. The rise in tax revenue that occurs as a result of growth in real...

  • 9 In the U.S econormy the money supply is cot A) U.S Treasury. B) Federal Reserve...

    9 In the U.S econormy the money supply is cot A) U.S Treasury. B) Federal Reserve System D) Senate Committee on Banking and Finance. 10. Ceteris paribus, if the Fed raised the required reserve ratio A) Banks could increase their lending B) The Federal funds interest rate would rise. The size of the monetary multiplier would decrease. D) The size of the monetary multiplier would increase. 11. Money is created when A) Loans are made. Checks written on one bank...

  • Explain how an increase in national income in Canada and Mexico, causing them to invest more...

    Explain how an increase in national income in Canada and Mexico, causing them to invest more into the United States impacts the loanable funds market, what happens to the interest rate in the US and why? What happens to US GDP and why?   Does foreign investment impact the loanable funds market in the same way that baby boomer's retiring will? Why or why not? Is foreign investment a good or bad thing for the US? Explain how having positive time...

  • ____   65.   Open market operations generally involve the purchase and sales of a. government securities. b....

    ____   65.   Open market operations generally involve the purchase and sales of a. government securities. b. stocks and bonds. c. coins and currency. d. Federal Reserve notes. ____   66.   The Fed relies on open market operations, which work a. with the Treasury in creating money to finance bonds. b. through major stock exchanges to influence bond prices. c. directly through the nonbank public to change their assets. d. through the banking system by affecting their reserves. ____   68.   If the...

  • For a firm that is financed by debt and equity, an increase in the percentage of...

    For a firm that is financed by debt and equity, an increase in the percentage of debt-financing a) will decrease WACC if the rate of return for debt holders is greater than the rate of return for equity holders. b) will increase WACC if the rate of return for debt holders is less than the rate of return for equity holders. c) both a) and b) are correct. d) neither a) nor b) are correct. e) will increase WACC if...

  • When the Fed sells bonds and drains reserves from the banking system, thereby reducing the supply...

    When the Fed sells bonds and drains reserves from the banking system, thereby reducing the supply of money, this policy will a. decrease short-term interest rates to a greater degree than long-term interest rates. b. decrease long-term interest rates to a greater degree than short-term interest rates. c. increase short-term interest rates to a greater degree than long-term interest rates. d. increase long-term interest rates to a greater degree than short-term interest rates. Empirical studies indicate that the velocity of...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT