Chapter 14 Pg 487

Q 4.7: Suppose that the federal reserve makes a $10 million discount loan to First National Bank (FNB) by increasing FBN’s account at the Fed.

A: Use a T-account to the impact of this transaction on FNB’s balance sheet. Remember that the funds a bank has on deposit at the Fed count as part of its reserves.

A: **Graph sent in separate email!

B: Assume that before receiving the discount loan, FNB has no excess reserves. What is the maximum amount of this $10 million that FNB can lend out?

A:

C: what is the maximum total increase in the money supply that can result from the Fed’s discount loan? Assume that the required reserve ratio is 10 percent.

A:

Q 12A.4: Suppose that autonomous consumption is 500, government purchases are 1,000, planned investment spending is 1,250, net exports are -250, and the MPC is 0.8. What is equilibrium GDP?

A:

## Help With Macroeconomics Please!!!! Any Answers Or Help Will Be Greatly Appreciated!!?

May 11th, 2013 admin

You need to look at some of the formulas here:

Budget Status = (Tn -G), this formula is also useful for Full Employment Government Budget or FEGB

The consumption function is the following:

C = a + bYd where the y intercept is a, and b is the slope

The savings function is the inverse of the consumption function(this you have to look up in the book) and the rest you have to look in your notes, if you cannot find good information in your notes or the book, you can google it or refer to the link below source(s). The reason I only gave a few formulas is because if I give too many, it will be like doing your assignment for you which I cannot do, it won’t help you learn.