Question: I really need some help with this problem thanks! Note: This chart shows the chain reaction that occurs when the Fed decides to engage in

 I really need some help with this problem thanks! Note: This

I really need some help with this problem thanks!

chart shows the chain reaction that occurs when the Fed decides to

Note: This chart shows the chain reaction that occurs when the Fed decides to engage in an expansionary monetary policy through open-market operations. When the Fed wants a contractionary monetary policy, it sells securities and the opposite outcome occurs. The Fed: How Does It Work? Part II Calls for more money Which means This money ends up to be printed so it can that more cash is being deposited in purchase securities like Treasury bills (bonds) put into circulation on the open (the money supply increases) The Federal market. Banks Reserve % BANK So they charge Lower interest lower interest And now banks have rates mean that rates to people more money to loan and businesses itittit Buy cars, purchase Will take out a home, or start a People more loans to... business Purchase new Will take out equipment or This should result more loans to... build a new in economic growth Businesses facility with lots of jobs! Document Analysis 4. According to the document, what type of monetary policy is the Fed carrying out and how will it impact the money supply? 5. According to the document, what happens when: a. The Fed buys securities? b. Banks have more money to loan? c. People take out more loans? d. Businesses take out more loans? 6. What is the end result of the Fed's decision to buy securities

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