Question

A 1 ) Whethewin FALSE A) run Anhalt The banks vides the bank within D) Bantal s tenkast ( int) Hverything else held constant, when the federal funderat the interest rate paid on reserves, the quantity of reserves demanded rises when the federal funds rate A) abvers B) above, falls C) below, rises D) below, falls 3. (4 points) Inflation results in A) ease of planning for the future. B) ease of comparing prices over time. C) lower nominal interest rates. D) difficulty interpreting relative price movements 4. (4 points) Suppose that from a new checkable deposit, First National Bank holds two million dollars in vault cash, eight million dollars on deposit with the Federal Reserve, and one million dollars in required reserves. Given this information, we can say First National Bank has million dollars in excess reserves A) three B) nine ten D) eleven 5. (4 points) Purchases and sales of government securities by the Federal Reserve are called

Answer 1

1) Solution: Bank capital is recorded as an asset on the bank balance sheet.

Explanation: The balance sheet of a bank is different compared to a typical company as it does not have accounts receivable, inventory, or accounts payable. Bank capital would not be shown as an asset on its balance sheet

2) Solution: above; falls

Explanation: When the federal funds rate is above the rate of interest paid on reserves, then everything else remaining unchanged the quantity of reserves demanded increases when the federal funds rate declines

3) Solution: difficulty interpreting relative price

Explanation: Inflation causes a difficulty interpretation of the relative price

4) Solution: nine

Explanation: Excess reserve = 8 million dollars on deposit with the Federal​ Reserve + 2 million dollars in vault​ cash - 1 million dollars in required reserves

5) Solution: open market operations

Explanation: Open market operations is a tool with which the Federal Reserve buys and sells the government bonds

7) Solution: Has no effect on the federal funds rate

Explanation: On the vertical section when the demand for federal funds intersects the reserve supply curve in market for reserves it would not have any impact on the federal funds rate

　

As per policy we have to snwered first four parts. I have answered more than 4 parts