You are required to hold 10 percentof checkable deposits as reserves. If you were faced with unexpected withdrawals of $30 million from time deposits, would you rather Option a: Draw down $10 million excess reserves and borrow $20 million from the Fed? Option b: Draw down $10 million excess reserves and sell securities of $20 million?

Option a: Draw down $10 million excess reserves and borrow $20 million from the Fed?

Explanation:

I would choose option A because it is cheaper, since the Fed will always charge a lower rate than any bond issuance. Even if you compare it to the cost of issuing new stocks, the equity holders will also demand a higher return (higher cost of equity) than the Fed.

Option B is more expensive and will reduce the equity of current shareholders more.  

the answer to this question would be shared investment

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