Homework Answers
The money supply in an economy is equal to the sum of cash in hand plus the deposit in banks. When a person deposits his cash of $100 in the bank account, he just converts cash to deposit. This alters the combination of money supply components and increases money multiplier. Each time the bank creates a new loan the money supply increases by the same amount. Then in this case after making $800 loan the money supply rises by $800.
Therefore, the correct option is: d. Increases money supply by $800
Add Answer to:
When a banker accepts a deposit of $1,000 in cash and puts $200 aside as required...
Assume that a bank receives a deposit of $1,000 in cash, puts aside $200 as required...
Assume that a bank receives a deposit of $1,000 in cash, puts aside $200 as required reserves, and makes a loan of $800, these transactions imply that: the money multiplier is 10. the money multiplier is 5. the money multiplier is 4. the money multiplier is 2. the money multiplier is 2.
d. $200 reserve ratio is 5 percent and the bank has $1,000 in deposits. Its reserves...
d. $200 reserve ratio is 5 percent and the bank has $1,000 in deposits. Its reserves amount to S5. S50. c. $95. d. $950 Suppose banks desire to hold no excess reserves and that the Fed has set a reserve requirement of 10 percent. If you deposit $9,000 into First Jayhawk Bank, a. First Jayhawk's required reserves increase by $900. b. First Jayhawk will be able to lend out $8,100 c. First Jayhawk's assets and liabilities both will increase by...
Ml equals currency + demand deposits + A)nothing else B)othere checkable deposits. C)traveler's checks + other checkable deposits. D)traveler's checks + other checkable deposits -+ savings de...
Ml equals currency + demand deposits + A)nothing else B)othere checkable deposits. C)traveler's checks + other checkable deposits. D)traveler's checks + other checkable deposits -+ savings deposits 2. If you deposit $100 of currency into a demand deposit at a bank, this action by itself A)does not change the money supply. B)increases the money supply. C)decreases the money supply. D)has an indeterminate effect on the money supply. 3. The manager of the bank where you work tells you that your...
8. The monetary multiplier Suppose that Ginny makes a new cash deposit of $120,000 at her...
8. The monetary multiplier Suppose that Ginny makes a new cash deposit of $120,000 at her bank. Suppose that the bank is required only to keep new cash reserves equal to 20%. Then the maximum amount Ginny's deposit will money supply is $ the Which of the following assumptions must hold to ensure that the money creation process initiated by Ginny's deposit reaches its potential? Check all that apply O All banks in the banking system lend all of their...
Student Name: Q1. (15 points) Bank Profits: Bank A has deposit liabilities of $200 million. It keeps the minimum ca...
Student Name: Q1. (15 points) Bank Profits: Bank A has deposit liabilities of $200 million. It keeps the minimum cash reserves required by law of 20 % and holds an additional 10% of minimum cash reserves. Now the lending- borrowing transactions are taking place and the funds lent out from one bank are returned to the banking system in the form of new deposits to another bank. For example, Bank A keeps its minimum required reserves and lends the excess...
Money Multiplier Scenario Sarah Saver goes to Investors National Bank and deposits $1,000 that she came...
Money Multiplier Scenario Sarah Saver goes to Investors National Bank and deposits $1,000 that she came from her summer job. She now has a checking account with a balance of $1,000 from which she can write checks. What will Investors National Bank do with this newly deposited money? Well, if there is a 10 percent reserve requirement, the bankers will put $100 in their vault and lend out the rest to people who need loans, Say Ernie Entrepreneur walks into...
Intermediate macroeconomics Due to lock down I need help with my homework please! I want help...
Intermediate macroeconomics Due to lock down I need help with my homework please! I want help understanding what I am doing wrong. I bolded and put an X next to what I got when I did the work myself but I am lost on question 13. With the options I listed the options under question! Questions 1 to 5 refer to the following. Question 1 Assume a Baumol-Tobin environment in which an individual receives an annual income of $80,000 in...
3. Happy Bank starts with $200 in bank capital. It then accepts $800 in deposits. It...
3. Happy Bank starts with $200 in bank capital. It then accepts $800 in deposits. It keeps 12.5 percent (1/8th) of deposits in reserve. It uses the rest of its assets to make loans. a. Show the balance sheet of Happy Bank. b. What is Happy Bank’s leverage ratio? c. Suppose that 10 percent of the borrowers from Happy Bank default and these bank loans become worthless. Show the bank’s new balance sheet. d. By what percentage do the bank’s...
If the Open Market Purchase is $1 billion by approximately how much will the supply of...
If the Open Market Purchase is $1 billion by approximately how
much will the supply of Money increase? Use my attached sheet to
answer this. How does your answer change if the reserve requirement
is lowered to 0%?
11 1x reserve requirement A c M 1 Transaction $1,000 2 1 3 reau in ce loan 51.000 51.000.00 $900.00 $310.00 5729.00 56561 $$90.43 5531.46 $478.30 $430.47 $187 42 $140.6 5311.30 5 6 7 G H percento Terve deposited Deposit Resverato requirement...
ition to make a b. technological knowledge. c. physical capital. d. human capital. [15]When we add...
ition to make a b. technological knowledge. c. physical capital. d. human capital. [15]When we add up currency, demand deposits, other checkable deposits, and travelers checks, we get a. the money supply, as univernsally defined by economists b. the totality of common stores of value in the United States c. M1. [16] The Bureau of Labor Statistics defines the unemployment rate as the percentage of a. those unemployed relative to those employed. b. the labor force that is unemployed. c....
d. $200 reserve ratio is 5 percent and the bank has $1,000 in deposits. Its reserves amount to S5. S50. c. $95. d. $950 Suppose banks desire to hold no excess reserves and that the Fed has set a reserve requirement of 10 percent. If you deposit $9,000 into First Jayhawk Bank, a. First Jayhawk's required reserves increase by $900. b. First Jayhawk will be able to lend out $8,100 c. First Jayhawk's assets and liabilities both will increase by...
Ml equals currency + demand deposits + A)nothing else B)othere checkable deposits. C)traveler's checks + other checkable deposits. D)traveler's checks + other checkable deposits -+ savings deposits 2. If you deposit $100 of currency into a demand deposit at a bank, this action by itself A)does not change the money supply. B)increases the money supply. C)decreases the money supply. D)has an indeterminate effect on the money supply. 3. The manager of the bank where you work tells you that your...
8. The monetary multiplier Suppose that Ginny makes a new cash deposit of $120,000 at her bank. Suppose that the bank is required only to keep new cash reserves equal to 20%. Then the maximum amount Ginny's deposit will money supply is $ the Which of the following assumptions must hold to ensure that the money creation process initiated by Ginny's deposit reaches its potential? Check all that apply O All banks in the banking system lend all of their...
Student Name: Q1. (15 points) Bank Profits: Bank A has deposit liabilities of $200 million. It keeps the minimum cash reserves required by law of 20 % and holds an additional 10% of minimum cash reserves. Now the lending- borrowing transactions are taking place and the funds lent out from one bank are returned to the banking system in the form of new deposits to another bank. For example, Bank A keeps its minimum required reserves and lends the excess...
Money Multiplier Scenario Sarah Saver goes to Investors National Bank and deposits $1,000 that she came from her summer job. She now has a checking account with a balance of $1,000 from which she can write checks. What will Investors National Bank do with this newly deposited money? Well, if there is a 10 percent reserve requirement, the bankers will put $100 in their vault and lend out the rest to people who need loans, Say Ernie Entrepreneur walks into...
If the Open Market Purchase is $1 billion by approximately how
much will the supply of Money increase? Use my attached sheet to
answer this. How does your answer change if the reserve requirement
is lowered to 0%?
11 1x reserve requirement A c M 1 Transaction $1,000 2 1 3 reau in ce loan 51.000 51.000.00 $900.00 $310.00 5729.00 56561 $$90.43 5531.46 $478.30 $430.47 $187 42 $140.6 5311.30 5 6 7 G H percento Terve deposited Deposit Resverato requirement...
ition to make a b. technological knowledge. c. physical capital. d. human capital. [15]When we add up currency, demand deposits, other checkable deposits, and travelers checks, we get a. the money supply, as univernsally defined by economists b. the totality of common stores of value in the United States c. M1. [16] The Bureau of Labor Statistics defines the unemployment rate as the percentage of a. those unemployed relative to those employed. b. the labor force that is unemployed. c....
Most questions answered within 3 hours.
-
Oxidative phosphorylation is achieved through chemiosmotic
coupling, which turns chemical energy into osmotic potential energy
that...
asked 30 minutes ago -
Hollywood Shoes would like to maintain their cash account at a
minimum level of $64,000, but...
asked 29 minutes ago -
Proteins CtrA-P, DnaA, and GcrA behave similarly to what
molecule in the Eukaryotic Cell Cycle?
asked 33 minutes ago -
TRUE OR FALSE
In case of a competitive tender procedure, in the request for
quotation, the...
asked 41 minutes ago -
I am a little behind please provide some explanation, will
provide thumbs up.
This question considers...
asked 44 minutes ago -
Let say the utility function as U(X,Y) = lnX + Y. Show that the
marginal rate...
asked 49 minutes ago -
A current of I=8.0A is flowing in a typical extension cord of
length L=3.00m. The cord...
asked 52 minutes ago -
1. When balancing the equation H2SO4 (aq) + NaOH (aq) →
Na2SO4(aq) + H2O(aq), would you...
asked 1 hour ago -
Provide a definition of “classification hierarchy” and
illustrate your definition with an example of how and...
asked 1 hour ago -
1. Describe the four main green solvents. Provide one example of
the use of each solvent....
asked 1 hour ago -
International ethics focus on:
1) exploitation of labor
2)corruption
3) environmental impact
4) none of the...
asked 1 hour ago -
Costing Models You work for XYZ trucking and your boss has asked
you to figure out...
asked 1 hour ago