Homework Answers
2)a) a cash withdrawal shown in Bank plus account
| Assets | Liabilities |
| Reserve:(-)$1000 | Deposit:(-)$1000 |
b) A withdrawal from Bankplus and a deposit in trust Mark
Bankplus T account
| Assets | liabilities |
| Reserves:(-)$1000 | Deposit :(-)$1000 |
Trust Mark T account
| Assets | liabilities |
| Reserves:(+)$1000 | Deposit :(+)$1000 |
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2 Assume that Mary withdraws $1000 from her account at BankPlus. Using the appropriate T-accounts show...
Short Answers: Please answer the following questions in the space provided for each. 1. Would you be more or less w...
Short Answers: Please answer the following questions in the space provided for each. 1. Would you be more or less willing to buy AT&T bonds under the following circumstances: (5 pts) a) Trading in these bonds increases, making them easier to sell. More willing: - Les willing: b) You expect a bull bear market in stocks (stocks prices are expected to rise). More willing: Les willing c) The gold market becomes more volatile. Les willing More willing: d) You expect...
Jane currently has $5,700 in her savings account and $2,000 in her checking account at the local bank. Instructions: Use a positive number to represent an increase and a negative number to represent a decrease. a. Suppose she withdraws $350 in cas
Jane currently has $5,700 in her savings account and $2,000 in her checking account at the local bank. Instructions: Use a positive number to represent an increase and a negative number to represent a decrease. a. Suppose she withdraws $350 in cash from her savings account. By what dollar amount does the country's money supply (M1 and M2) change as a result of Jane's actions?b. Now suppose instead that Jane withdraws $350 from her checking account and uses $190 of this money to pay her federal...
a) A customer deposits $10,000 check into her checking account. Use a T-account to show how...
a) A customer deposits $10,000 check into her checking account. Use a T-account to show how her bank will reflect this transaction. b) Using a T-account, show how the bank will reflect the transaction once the funds become available. c) Assuming the bank has a 10% required reserve requirement, show on a T-account the required and excess reserves. d) Assume that this bank decides to make a car loan using the excess reserves from our customer's deposit. Show this transaction...
2. Multiple Choice Question #2 Sara withdraws $2,000 from her small time deposit account at Bank...
2. Multiple Choice Question #2 Sara withdraws $2,000 from her small time deposit account at Bank of America, keeps $400 in cash, and deposits the rest in her checking account at Citibank. What is the immediate change in M1 and M2? O M1 increases by $400 and M2 decreases by $400. O M1 and M2 increase by $2,000. O M1 increases by $2,000 and there is no change in M2. O M1 increases by $2,000 and M2 decreases by M2.
Suppose Janice takes $4,000 in coins to the bank to deposit into her checking account. Assume...
Suppose Janice takes $4,000 in coins to the bank to deposit into her checking account. Assume the reserve requirement at all banks is 20%. When Janice deposits the $4,000 into the bank, the bank can lend Mary, another one of the bank's customers, $ Suppose Mary takes the loan and use it to buy a used car from Susan. When Susan deposits the check in her bank, Susan's bank can lend $ to Eva, another one of the bank's customers....
If Mrs. Ethridge moves $3,000 from her savings account into her checking account: M1 stays the...
If Mrs. Ethridge moves $3,000 from her savings account into her checking account: M1 stays the same, M2 decreases, and the system becomes less liquid. Ml increases, M2 decreases, and the system becomes more liquid. M1 increases, M2 stays the same, and the system becomes more liquid. Mlincreases, M2 increases, and the system becomes less liquid. M2 includes M1 plus all of the following except: savings deposits. money market accounts. U.S. Treasury Bonds small-denomination time deposits. Reserve requirement on commercial...
Consider the balance sheet for the Wahoo bank as presented below. Wahoo Bank Balance Sheet Assets Liabilities government securities $1,600 Liabilities: Checkin...
Consider the balance sheet for the Wahoo bank as presented below. Wahoo Bank Balance Sheet Assets Liabilities government securities $1,600 Liabilities: Checking accounts $4,000 Required Reserves $400 Net Worth $1,000 Excess Reserves $0 Loans $3,000 Total Assets $5,000 Total Liabilities $5,000 Using a required reserve ratio of 10% and assuming that the bank keeps no excess reserves, write the changes to the balance sheet for each of the following scenarios: Bennett withdraws $500 from his checking account. The Fed buys...
What are the features of commodities suitable for using as money? What are the drawbacks...
What are the features of commodities suitable for using as money? What are the drawbacks of the following to be considered as money? Nails, Cigarettes, Sea Shells a. Consider the following monetary statistics. US$ Currency held by Public = 100 Reserves (Currency) held by Banks = 300 Checking Accounts = 500 Savings Accounts = 1000 Estimate high powered money (monetary base), narrow money and broad money. b. What happens to those monetary aggregates (MB, M1 and M2) in...
Incorrect Question 21 0/1 pts Lulu withdraws $100 cash from her deposit account at Mid First...
Incorrect Question 21 0/1 pts Lulu withdraws $100 cash from her deposit account at Mid First bank (Assume Mid First had the funds in excess reserve). The immediate result is M1_ and M2 o increases/decreases o increases/does not change O does not change/does not change O decreases/increases decreases/does not change
7. The money creation process Suppose First Main Street Bank, Second Republic Bank, and Third Fidelity...
7. The money creation process Suppose First Main Street Bank, Second Republic Bank, and Third Fidelity Bank all have zero excess reserves. The required reserve ratio is 10%. The Federal Reserve buys a government bond worth $500,000 from Brian, a client of First Main Street Bank. He deposits the money into his checking account at First Main Street Bank. Complete the following table to reflect any changes in First Main Street Bank's T-account (before the bank makes any new loans). Complete the foilowing...
Short Answers: Please answer the following questions in the space provided for each. 1. Would you be more or less willing to buy AT&T bonds under the following circumstances: (5 pts) a) Trading in these bonds increases, making them easier to sell. More willing: - Les willing: b) You expect a bull bear market in stocks (stocks prices are expected to rise). More willing: Les willing c) The gold market becomes more volatile. Les willing More willing: d) You expect...
a) A customer deposits $10,000 check into her checking account. Use a T-account to show how her bank will reflect this transaction. b) Using a T-account, show how the bank will reflect the transaction once the funds become available. c) Assuming the bank has a 10% required reserve requirement, show on a T-account the required and excess reserves. d) Assume that this bank decides to make a car loan using the excess reserves from our customer's deposit. Show this transaction...
2. Multiple Choice Question #2 Sara withdraws $2,000 from her small time deposit account at Bank of America, keeps $400 in cash, and deposits the rest in her checking account at Citibank. What is the immediate change in M1 and M2? O M1 increases by $400 and M2 decreases by $400. O M1 and M2 increase by $2,000. O M1 increases by $2,000 and there is no change in M2. O M1 increases by $2,000 and M2 decreases by M2.
Suppose Janice takes $4,000 in coins to the bank to deposit into her checking account. Assume the reserve requirement at all banks is 20%. When Janice deposits the $4,000 into the bank, the bank can lend Mary, another one of the bank's customers, $ Suppose Mary takes the loan and use it to buy a used car from Susan. When Susan deposits the check in her bank, Susan's bank can lend $ to Eva, another one of the bank's customers....
If Mrs. Ethridge moves $3,000 from her savings account into her checking account: M1 stays the same, M2 decreases, and the system becomes less liquid. Ml increases, M2 decreases, and the system becomes more liquid. M1 increases, M2 stays the same, and the system becomes more liquid. Mlincreases, M2 increases, and the system becomes less liquid. M2 includes M1 plus all of the following except: savings deposits. money market accounts. U.S. Treasury Bonds small-denomination time deposits. Reserve requirement on commercial...
Incorrect Question 21 0/1 pts Lulu withdraws $100 cash from her deposit account at Mid First bank (Assume Mid First had the funds in excess reserve). The immediate result is M1_ and M2 o increases/decreases o increases/does not change O does not change/does not change O decreases/increases decreases/does not change
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