Assume that the reserve requirement is 5 percent.

If the Federal Reserve buys $2,000 worth of bonds, the largest possible increase in the money supply is $

If someone deposits in a bank $2,000 that she had been hiding in her cookie jar, the largest possible increase in the money supply is $.

All other things equal, the money supply will expand more if the Federal Reserve buys $2,000 worth of bonds than if someone deposits in a bank $2,000 that she had been hiding in her cookie jar. True False

C. piggy bankbecause everything has interest rates over a period of time whereas a personal keeping of money has no other interaction therefore no interest rates.

Secured loans are protected by collateral security. examples: title loans where the borrower uses the car title as collateral security interest rates are lower and repayments are longer therefore risk is low as a collateral security is given as guarantee to the bank in case of failure to pay the loanunsecured loans are not protected by collateral security but it is given on the creditworthiness of the borrower, trusting that she/he will pay on time. examples; payday loans is a short term loan where the borrower lends money from the bank and pays is back when the borrower receives his/her wages.interest rates are high and repayments are shorter. but the risk is high as no collateral security is given as a guarantee to the bank for payment of the loan

Next mouth we will have a new moon.