Question

Question 14 (1 point) Question 12 (1 point) Consider the following simplified balance sheet for a bank. Suppose the required reserve ratio decreases from 10 percent to 5 percent. By how much can the bank increase its loans? Provide your answer in dollars measured in thousands rounded to two decimal places. Do not include any symbols, such as "$", "%," or ","in your answer. Suppose the supply of money, measured by M1, is $3.0 trillion, output, measured by real GDP, is $16.6 trillion, and the velocity of money is 6.5. Suppose the supply of money increases to $3.5 trillion but GDP and the velocity of money do not change. What is the percent by which prices change? Provide your answer as a percentage rounded to two decimal places. Do not include any symbols, such as "S"","","or","in your answer. Assets 510 thousand Liabilities 5100 thousand Reserves Deposits Your Answer: Your Answer: Answer Answer Question 15 (1 point) Consider the following simplified balance sheet for a bank. Suppose the required reserve ratio decreases from 10 percent to 5 percent. By how much will bank deposits increase provide your answer in dollars measured in thousands rounded to two decimal places. Do not include any symbols, such as "," %," or ","in your answer. Question 13 (1 point) Suppose the growth in the quantity of money is 3.8 percent and growth in output (GDP) is 1.5 percent. What is the rate of price inflation, if any. Provide your answer as a percentage rounded to two decimal places. Use a negative sign for negative changes. Do not include any symbols, such as "$," "="%," or "," in your answer. Liabilities Reserves $10 thousand Deposits $100 thousand Your Answer: Your Answer: Answer Answer KucBLIVIT PUITIL) Suppose GDP is 21.6 trillion and aggregate expenditures are 18.8 trillion. How does inventory change? Calculate the change in the level of inventory, if any. Provide your answer in dollars measured in trillions rounded to two decimal places. Use a negative sign "-" to indicate a decrease in inventory but do not include any other symbols, such as "$""""%," or ", " in your answer. Your Answer: Answer Question 4 (1 point) Suppose an economy is initially in equilibrium when GDP equals $19 trillion. Now suppose investment spending decreases by $1.1 trillion and that the economy's multiplier is 5. What is the new equilibrium level of GDP? Provide your answer in dollars measured in trillions round to two decimal places. Do not include any symbols, such as "$,"","%," or "," in your answer. Your Answer:

Answer 1

Question 14

Deposits = $100,000

Reserves = $10,000

Initial required reserve ratio = 10% or 0.10

Initial required reserves = Deposit * Initial required reserve ratio = $100,000 * 0.10 = $10,000

The initial required reserves is $10,000.

New required reserve ratio = 5% or 0.05

New required reserves = Deposit * New required reserve ratio = $100,000 * 0.05 = $5,000

The new required reserves is $5,000.

When required reserve ratio decreases, excess reserves with bank increases.

Increase in excess reserves = Initial required reserves - New required reserves = $10,000 - $5,000 = $5,000

The excess reserves with bank increases by $5,000.

A bank can make loan out of excess reserves it held. The excess reserves of bank has increased by $5,000.

So,

The bank can increase its loan by $5,000.

Note -: As HOMEWORKLIB Answering Policy, in case of multiple questions being posted, 1st question is answered with elaborate explanation.