Answer the question on the assumption that the legal reserve ratio is 20 percent. suppose that the fed sells $500 of government securities to commercial banks (paid for out of commercial bank reserves) and buys $500 of securities from individuals, who deposit the cash in checking accounts. as a result of the given transactions, excess reserves in the banking system will

 The excess reserves in banking system remains unchanged.

Explanation:

(1) Fed sells $500 of government securities to commercial bank, so commercial pays $500 to fed, $500 debited from commercial bank (paid out of reserves).

(2) Now, fed buys $500 securities from individuals, and individuals deposited that amount into checking accounts. So, banks will receive $500.

Hence, purchase of securities is offset by the checkable deposits it receives from individuals. So, excess reserves in the banking system will remains unchanged.

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