Suppose the federal reserve wants to increase the money supply by $200. again, you can assume that banks do not hold excess reserves and that households do not hold currency. if the reserve requirement is 10%, the fed will use open-market operations to worth of u. s. government bonds?

The fed needs to purchase bonds worth $20 from the banks to increase money supply by $200.

Explanation:

The Federal Reserve wants to increase the money supply by $200.

The reserve requirement is 10%.

The fed can increase the money supply by purchasing bonds from commercial banks.  

The money supply will increase by money multiplier times worth of bonds.  

Increase in money supply =

$200 =

Worth of bonds =

Worth of bonds = $20  

So the fed needs to purchase bonds worth $20 from the banks to increase money supply by $200.

hi,

henry is an economist and wants to understand the relationship between inflation and consumer spending habits. for his research, he needs the consumer price index for 2014 and the inflation rate. based on the prices of goods given, what will he find to be the cpi and inflation rate for 2014? assume that a consumer’s basket for three consecutive years consists of the following:

you dont privide answer choices.

answer - 15% of a inflatation rate is 15% less in cpi

b.

c.

d.

g.

those r all of them i believe