Homework Answers
Ans:
1)
Money supply = $8000 billion
Explanation
Money Multiplier = 1 / Required reserve ratio
= 1 / 0.1
= 10
Money supply = Deposits * Money multiplier
= $800 billion * 10
= $8000 billion
2)
currency -deposits ratio = 50%
Explanation
currency -deposits ratio = ( currency / deposits ) * 100
= ($400 billion / $800 billion) * 100
= 50%
Add Answer to:
1. If the required reserve ratio is 10 percent, currency in circulation is $400 billion, checkable...
If the required reserve ratio is 10 percent, currency in circulation is $400 billion, checkable deposits...
If the required reserve ratio is 10 percent, currency in circulation is $400 billion, checkable deposits are $800 billion, and excess reserves total $0.8 billion then the money supply is a) 1200 b)8400 c) 8000 d)1200.8 answer is A
14) If the desired reserve ratio is ten percent, currency in circulation is $400 billion, and...
14) If the desired reserve ratio is ten percent, currency in circulation is $400 billion, and chequable deposits are $800 billion, then the money multiplier is approximately ________. A) 2.5 B) 1.67 C) 2.0 D) 0.601 16) If the desired reserve ratio is ten percent, currency in circulation is $400 billion, chequable deposits are $800 billion, and excess reserves total $0.8 billion, then the excess reserves-chequable deposit ratio is ________. A) 0.001 B) 0.10 C) 0.01 17) If the desired...
6. If reserves in the banking system increase by $100, then checkable deposits will increase by...
6. If reserves in the banking system increase by $100, then checkable deposits will increase by $400 in the simple model of deposit creation when the required reserve ratio is eserve retioKeserves De posi+s 7. If the required reserve ratio is one-third, curreney in circulation is $300 billion, checkable deposits are $900 billion, and there is no excess reserve, then the MI money multiplier is 8. If the required reserve ratio is 10 percent, currency in circulation is $400 billion,...
1. Suppose that currency in circulation is $600 billion, the amount of checkable deposits is $900...
1. Suppose that currency in circulation is $600 billion, the amount of checkable deposits is $900 billion, required reserve on checkable deposits is 10% and excess reserves are $15 billion. a. Calculate the money supply, the currency deposit ratio, the excess reserve ratio, and the money multiplier. Suppose the central bank conducts an unusually large open market purchase of bonds held by banks of $1400 billion due to a sharp contraction in the economy. Assuming the ratios, you calculated in...
Required reserve ratio is 0,2, there are 217B currency in circulation, 667B checkable deposits, and 4,6B...
Required reserve ratio is 0,2, there are 217B currency in circulation, 667B checkable deposits, and 4,6B of excess reserves. What is money multiplier? ” in circulation, 6678 chockablo deposits
Required reserve ratio is 0,2, there are 217B currency in circulation, 667B checkable deposits, and 4,6B...
Required reserve ratio is 0,2, there are 217B currency in circulation, 667B checkable deposits, and 4,6B of excess reserves. What is money multiplier?
2. Let's assume that in a hypothetical economy currency in circulation is $600 billion, the amoun...
2. Let's assume that in a hypothetical economy currency in circulation is $600 billion, the amount of checkable deposits is $900 billion, excess reserves are $15 billion and required reserve ratio is 10%. a. Calculate money supply, currency to deposit ratio, excess reserve ratio and money multiplier. b. Suppose Fed conducts very large open market purchase of $1400 billion due to a sharp recession. Assuming the ratios hold, what will be the effect on money supply? c. Now suppose the...
money and banking 3. (A) Calculate the money multiplier for the following information: the required reserve ratio i...
money
and banking
3. (A) Calculate the money multiplier for the following information: the required reserve ratio is 10%, currency in circulation is $400 billion, checkable deposits are $800 billion, and excess reserves are $0.8 billion. (10pts) (B) if the Fed wants to decrease money supply by $200 billion, given your answer in part (A) describe the action the Fed needs to take. (5pts) 4. First National n
7. A decrease in the nonborrowed monetary base, everything else hela constant( the multiplier the same)...
7. A decrease in the nonborrowed monetary base, everything else hela constant( the multiplier the same) will cause the money supply D. Demand deposits to rise 8. Everything else held constant, a decrease in excess reserves will he money supply to rise c No change in will cause A. The money supply to rise B. The money supply to remain constant C. The money supply to fall D. Checkable deposits to rise 9. If the required reserve ratio is 15...
Answer Part B please 2. Suppose that currency in circulation is $600 billion, the amount of...
Answer Part B please
2. Suppose that currency in circulation is $600 billion, the amount of chequable deposits is $900 billion, excess reserves are $15 billion, and the desired reserve ratio ra is 10%. a. Calculate the money supply, the currency deposit ratio, the excess reserve ratio, and the money multiplier. b. Suppose the central bank conducts an unusually large open market purchase of bonds held by banks of $1400 billion due to a sharp contraction in the economy. Assuming...
6. If reserves in the banking system increase by $100, then checkable deposits will increase by $400 in the simple model of deposit creation when the required reserve ratio is eserve retioKeserves De posi+s 7. If the required reserve ratio is one-third, curreney in circulation is $300 billion, checkable deposits are $900 billion, and there is no excess reserve, then the MI money multiplier is 8. If the required reserve ratio is 10 percent, currency in circulation is $400 billion,...
1. Suppose that currency in circulation is $600 billion, the amount of checkable deposits is $900 billion, required reserve on checkable deposits is 10% and excess reserves are $15 billion. a. Calculate the money supply, the currency deposit ratio, the excess reserve ratio, and the money multiplier. Suppose the central bank conducts an unusually large open market purchase of bonds held by banks of $1400 billion due to a sharp contraction in the economy. Assuming the ratios, you calculated in...
Required reserve ratio is 0,2, there are 217B currency in circulation, 667B checkable deposits, and 4,6B of excess reserves. What is money multiplier? ” in circulation, 6678 chockablo deposits
Required reserve ratio is 0,2, there are 217B currency in circulation, 667B checkable deposits, and 4,6B of excess reserves. What is money multiplier?
2. Let's assume that in a hypothetical economy currency in circulation is $600 billion, the amount of checkable deposits is $900 billion, excess reserves are $15 billion and required reserve ratio is 10%. a. Calculate money supply, currency to deposit ratio, excess reserve ratio and money multiplier. b. Suppose Fed conducts very large open market purchase of $1400 billion due to a sharp recession. Assuming the ratios hold, what will be the effect on money supply? c. Now suppose the...
money
and banking
3. (A) Calculate the money multiplier for the following information: the required reserve ratio is 10%, currency in circulation is $400 billion, checkable deposits are $800 billion, and excess reserves are $0.8 billion. (10pts) (B) if the Fed wants to decrease money supply by $200 billion, given your answer in part (A) describe the action the Fed needs to take. (5pts) 4. First National n
7. A decrease in the nonborrowed monetary base, everything else hela constant( the multiplier the same) will cause the money supply D. Demand deposits to rise 8. Everything else held constant, a decrease in excess reserves will he money supply to rise c No change in will cause A. The money supply to rise B. The money supply to remain constant C. The money supply to fall D. Checkable deposits to rise 9. If the required reserve ratio is 15...
Answer Part B please
2. Suppose that currency in circulation is $600 billion, the amount of chequable deposits is $900 billion, excess reserves are $15 billion, and the desired reserve ratio ra is 10%. a. Calculate the money supply, the currency deposit ratio, the excess reserve ratio, and the money multiplier. b. Suppose the central bank conducts an unusually large open market purchase of bonds held by banks of $1400 billion due to a sharp contraction in the economy. Assuming...
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