经济学原理-宏观-功课7daan

1、经济学原理宏观经济学principles of economics: macroeconomicsassignment 7 (week 8) money and bankingprogress! do not regress!edward c. prescott1. consider the following terms concerning the functions and forms of money.(a) money has four functions. the first function which gives the definition ofmoney is: money

2、 as a(n)medium_ _of_ _moneyexchange_ the second function of money is as a(n)unit of account since units of money serve as an agreed measure for stating the prices of goods and services money also provides an agreed measure that allows contracts to be written for future receipts and payments. it is t

3、hus a standard of _deferred paymentfinally, money serves as a(n) _store ofvalue_since it can be held and exchanged later for goods or services.(b) at present, three official measures of the money stock in china are publishedmo referes to all _currenciesin circulation. ml, known as_narrowly _ _define

4、d_money, is equal to mo plusnon household demand deposits. finally, m2, known as_broadly_defined_ money, is equal to ml plus _qusi-money、 the last item referring to non-household fixed deposits plushousehold saving deposits plus non-household other deposits plus guarantee funds of clients with secur

5、ities companies.2. consider the following terms concerning financial intermediation.(a) a(n) _financial intermediary_ is a finn that borrows money fromhouseholds and firms and lends money to other households and firms. its main functions include the following: to minimize the -transaction _cost of o

6、btaining funds, to minimize the cost of _monitoring_ borrowers, to reduce the risk of _default_ by lending to a large number of individuals, and to create liquidity by borrowing short and lending long.(b) a(n) balance sheet is a statement that lists a fimfs assets andliabilities. assets are the thin

7、gs of value that a firm owns. liabilities are the things that a firm owes to households and other firms. the cash in a bank's vault plus its deposits at the central bank are called its _reserves_. the degree to which an asset is instantly convertibleinto money at a known price is known as its _

8、liquidity 3 let d = deposits, c = cash, and r = reserves. then let a = c/d, the ratio of cash to deposits, and b = r/d, the ratio of reserves to deposits. the table below gives alternative values for a across its top margin and alternative values for b down its left margin. 1+a/a+b0.050.100

9、.1522/324/526/711/2413/422/524/726/9with a or b increasing, the money multiplier will decrease.complete the tabic by computing the money multiplier for each of the combinations of a and b. what happens to the money multiplier as a increases, and as b increases?5. the graph below illustrates the curr

10、ent equilibrium in the money market.4. suppose an individual sells ¥1000 worth of government securities to the central bank and deposits the proceeds (¥1000) in bank 1. assume that the desired reserve ratio for all banks is 0-2. also assume that there is no cash drain. the table below give

11、s information for the first round of the money expansion process that will be generated by this new deposit.banknewnewnewincreasecumulativenumberdepositsloansreservesin moneyincrease in(v)(¥)(v)(v)money (¥)1100080020080080028006401606401440364051212851219524512409.6102.4409.62361.65409.632

12、7.6881.92327.682689.286327.68262.14465.536262.1442951.424(a) complete the remaining five rows of the table(b) what is the total increase in the quantity of money after 6 rounds? 295l424(c) what is the money multiplier?l/0.2=5(d) after all rounds have been completed, what will the total increase in moneybe?1000(5-1)=4000(a) suppose the central bank wants to stimulate aggregate expenditure by lowering the interest rate to 6%. by how much must it increase the nominal money supply if the price level is 2?(70-60)*2=20(b) if the cash to depo