A country has no travelers’ checks and it has the data given below. What is the...
A country has no travelers’ checks and it has the data given below. What is the value for
checking account balances? __________
Currency issued = 1400 Vault cash= 400 rrr = 10%
err = 5 % bank reserves with the Fed = 1600cr = ?
Total deposits in banks = 10,000 govt budget deficit = 300
Note: M1 ={ (1 + cr)/(rrr + err + cr)} x MB
Homework Answers
Calculate the monetary base (MB) -
Monetary base = Currency issued + Bank reserves with the Fed + Valut cash
Monetary base = 1400 + 1600 + 400
Monetary base = 3400
The monetary base is 3400.
Calculate the currency deposit ratio =
cr = curreny/deposit = 1400/10000 = 0.14
The currency-deposit ratio is 0.14
Calculate the money multiplier -
Money multiplier = (1 + cr)/(rrr + err + cr)
Money multiplier = (1 + 0.14)/(0.10 + 0.05 + 0.14)
Money multiplier = 1.14/0.29 = 3.93
The money multiplier is 3.93
Calculate the M1 money supply -
M1 = Money multiplier * MB
M1 = 3.93 * 3400 = 13,362
The M1 money supply is 13362.
Calculate the checking account balances -
Checking account balances = M1 money supply - Currency issued
Checking account balances = 13362 - 1400 = 11962
The checking account balances is 11,962
Add Answer to:
A country has no travelers’ checks and it has the data given
below. What is the...
a country has no travelor checks and it has the data given below. what is the...
a
country has no travelor checks and it has the data given below.
what is the value gor checking account balances.
29. Another country has a monetary growth rate of 8% in a year when the economic growth rate is 4%. The velocity of money is always 4. What is the inflation rate? 30. A country has no travelers' checks and it has the data given below. What is the value for checking account balances? Vault err = 5% Currency...
1.) Gold, silver, and furs, when used as money, are referred to as fiat money precious...
1.) Gold, silver, and furs, when used as money, are referred to as fiat money precious money paper currency commodity money exchange money 2.) The money supply is considered to be M1. M1 consists of what? currency + checking account balances + saving account balances currency + checking account balances + travelers' checks currency + checking account balances + credit cards currency + credit cards + certificates of deposit currency only 3.) The main purpose of financial intermediaries is that...
1) A bank has checking deposits of $400, saving deposits of $900, time deposits of $900,...
1) A bank has checking deposits of $400, saving deposits of $900, time deposits of $900, loans of $950, government securities of $900, outstanding credit card balances of $400, currency in its vault of $40, and deposits in its reserve account at the Fed of $40. What is the amount of this bank's deposits that are in M1? What is the amount of this bank's deposits that are in M2? What is the amount of this bank's...
Gold, silver, and furs, when used as money, are referred to as a- fiat money b-precious...
Gold, silver, and furs, when used as money, are referred to as a- fiat money b-precious money c-paper currency d-commodity money The money supply is considered to be M1. M1 consists of what? a-currency + checking account balances + saving account balances b-currency + checking account balances + travelers' checks c-currency + checking account balances + credit cards d-currency + credit cards + certificates of deposit e-currency only The main purpose of financial intermediaries is that a-the process of finding...
A bank with $200 million in transaction deposits keeps $20 million in cash in the bank...
A bank with $200 million in transaction deposits keeps $20 million in cash in the bank vault, $10 million in deposits at the Fed, and $5 million in government securities in the bank vault. Its total reserves equal 1) $10 million. 2) $35 million. 3) $30 million. 4) $20 million. All of the following are included in M1 EXCEPT 1) checking account balances. 2) traveler's checks. 3) money market mutual fund shares. O 4) coin and currency.
Suppose that in a country, there are only two banks, Bank A and Bank B. The...
Suppose that in a country, there are only two banks, Bank A and Bank B. The file HW9 Bank Balance Sheets shows their balance sheets. Here are some simplifying assumptions to make our lives a bit more bearable: 1. The country uses dollars as its unit of accounts. 2. There are no travelers' checks. 3. There are no fancy accounts in this country like money market mutual funds deposits. 4. Other deposits consist of saving deposits by households as well...
really money supply, monetary base, nominal GDP, real GDPprice level and M1 21. If the capital...
really money supply, monetary base, nominal GDP, real GDPprice
level and M1
21. If the capital stock in the country for #19 was 1000 at the end of the previous year, then what was the value for the capital stock at the end of this year? 22. Calculate the value for M1 using the data given below. ANS: M1 = traveler's vault Savings Checking account balances = 2000 checks = 100 Currency in circulation - 1000 cash = 200 Money...
The reserve requirement sets the required percentage of vault cash plus deposits with the regional Federal...
The reserve requirement sets the required percentage of vault cash plus deposits with the regional Federal Reserve Banks that banks must keep for their deposits. Many banks have widespread branches and ATMs. How would the existence of branches and ATMs affect the level of excess reserves (above those required) that banks are able to hold? ATMs require a lot of vault cash, thus increasing excess reserves. ATMs increase excess reserves, which increases the money multiplier. The existence of ATMs does...
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...
1.)The ____________ is the sum of currency and reserve deposits, the monetary _________ of the central...
1.)The ____________ is the sum of currency and reserve deposits, the monetary _________ of the central bank A.)money stock; assets B.)money stock; liabilities C.)monetary base; liabilities D.)monetary base; assets 2.)Time deposits are ______ liquid than savings deposits and typically earn a _________ interest rate than savings deposits. A.)less; higher B.)more; higher C.)more; lower D.)less; lower 3.)If banks must hold $2 in reserves for each $10 in deposits, and the public decides to hold $3 in currency for each $10 in...
a
country has no travelor checks and it has the data given below.
what is the value gor checking account balances.
29. Another country has a monetary growth rate of 8% in a year when the economic growth rate is 4%. The velocity of money is always 4. What is the inflation rate? 30. A country has no travelers' checks and it has the data given below. What is the value for checking account balances? Vault err = 5% Currency...
A bank with $200 million in transaction deposits keeps $20 million in cash in the bank vault, $10 million in deposits at the Fed, and $5 million in government securities in the bank vault. Its total reserves equal 1) $10 million. 2) $35 million. 3) $30 million. 4) $20 million. All of the following are included in M1 EXCEPT 1) checking account balances. 2) traveler's checks. 3) money market mutual fund shares. O 4) coin and currency.
Suppose that in a country, there are only two banks, Bank A and Bank B. The file HW9 Bank Balance Sheets shows their balance sheets. Here are some simplifying assumptions to make our lives a bit more bearable: 1. The country uses dollars as its unit of accounts. 2. There are no travelers' checks. 3. There are no fancy accounts in this country like money market mutual funds deposits. 4. Other deposits consist of saving deposits by households as well...
really money supply, monetary base, nominal GDP, real GDPprice
level and M1
21. If the capital stock in the country for #19 was 1000 at the end of the previous year, then what was the value for the capital stock at the end of this year? 22. Calculate the value for M1 using the data given below. ANS: M1 = traveler's vault Savings Checking account balances = 2000 checks = 100 Currency in circulation - 1000 cash = 200 Money...
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...
Most questions answered within 3 hours.
-
You roll a fair 6-sided dice, let Y be the outcome of the dice
roll. Then...
asked 22 minutes ago -
If the value of the range is equal to zero, then this indicates
that:
A. there...
asked 43 minutes ago -
Based on Simms' (1994) articulation of psychological privacy to
promote development of self-identity, for example, do...
asked 5 minutes ago -
Use C programe to :
Develop an algorithm, flow chart and write a C program to...
asked 28 minutes ago -
Benzene has a vapor pressure of 75.0 Torr at 22.0 °C and an
enthalpy of evaporation...
asked 11 minutes ago -
How does a leadership philosophy shape service delivery in a
human services organization?
asked 21 minutes ago -
Which of the following statements about hormonal regulation of
glycogen synthesis and degradation are correct?
Multiple...
asked 26 minutes ago -
1. Describe all
necessary steps and conditions for execution of a java".
2. What
is maven...
asked 38 minutes ago -
What is the temperature of a 3.5L container with 1.502 mol
carbon dioxide at 10.76 atm?...
asked 33 minutes ago -
A dragster makes a pass down a track in exactly 7.03 seconds.
You do not know,...
asked 37 minutes ago -
What evidence can you provide to illustrate why
crowdsourcing is able to reduce system development costs?...
asked 42 minutes ago -
Hi, I was wondering if I could get some help on a java program
that I...
asked 48 minutes ago