Suppose the target range for the federal funds rate is 1.5 to 2 percent but that the equilibrium federal funds rate is currently 1.7 percent. assume that the equilibrium federal funds rate falls (rises) by 1 percent for each $90 billion in repo (reverse repo) bond transactions the fed undertakes. if the fed wishes to lower the equilibrium federal funds rate to the bottom end of the target range, will it repo or reverse repo bonds to non-bank financial firms? how much will it have to repo or reverse repo?

Assume that a local bank sells two services, checking accounts and atm card services. the bank’s only two customers are mr. donethat and ms. beenthere. mr. donethat is willing to pay $8 a month for the bank to service his checking account and $2 a month for unlimited use of his atm card. ms. beenthere is willing to pay only $5 for a checking account, but is willing to pay $9 for unlimited use of her atm card. assume that the bank can provide each of these services at zero marginal cost.refer to scenario 17-5. if the bank is unable to use tying, what is the profit-maximizing price to charge for a checking account