Are the banks fully utilizing their lending capacity

Assignment Help Macroeconomics
Reference no: EM132181437

Assume the banking system contains the following amounts. Use this information to answer five questions.

total revenues $140 billion

transactions deposits. $700 billion

cash held by public. $300 billion

reserve requirement 0.2

Instructions: Enter your responses rounded to the nearest whole number.

a. Are the banks fully utilizing their lending capacity?

  • Yes
  • No

b. What would happen to the money supply initially if the public deposited $20 billion of cash in transactions accounts?

  • Increase by $20 billion
  • More information is needed
  • No change
  • Decrease by $20 billion

c. What would the lending capacity of the banking system be after this deposit?

    $  billion

d. How large would the money supply be if the banks fully utilized their lending capacity?

    $  billion

Reference no: EM132181437

Questions Cloud

Provide example of failsafing in service design : Provide an example of failsafing in service design. Explain why our example qualifies as failsafing.
What is the contractual interest rate : In part a, round your response to one decimal place. In part b, round your response to two decimal places.
Briefly discuss the reason for the charges : Briefly discuss the reason for the charges and provide two (2) reasons why you agree or disagree with the verdict and any penalties.
Behavioral patterns while values are stable life goals : The text defines personality as “a person’s relatively stable feelings, thoughts, and behavioral patterns” while values are “stable life goals,
Are the banks fully utilizing their lending capacity : Assume the banking system contains the following amounts. Use this information to answer five questions.
Analysis of the statistics : these statistics from the U.S. Census Bureau (group author, no acronyms) in 2014 on page 2 plus an analysis of the statistics?
Discuss marketing strategies for the proposal : Discuss marketing strategies for the proposal based on the target group's potential responses to the final questionnaire.
Construct a timeline that graphically depicts the evolution : Construct a timeline that graphically depicts the evolution of CIP from pre 9-11 to present. An assessment of where we are now in the present day.
Draw the total consumer surplus on the graph : Draw the total consumer surplus (CS) on the graph by moving the square labelled CS. Note that the area may not necessarily be rectangular.

Reviews

Write a Review

Macroeconomics Questions & Answers

  How a profit-maximizing firm minimizes its loss

Assume that a profit-maximizing firm is perfectly competitive in both the output and the factor markets and is at its long-run equilibrium. The firm's output is 100 units, its total revenue is $600.00, and the fixed cost of production is $50.00. B..

  Compute the international supply and global monopoly

Suppose we have a competitive market for a good with domestic demand and supply given by:

  Prices are flexible in the economy

Why is it important that prices are flexible in the economy? Do you think government should be involved in manipulating prices?

  Examine role of third world pressure groups such as unctad

Examine the role of Third World pressure groups such as UNCTAD. What criteria and data would you use to decide if Hong Kong were developed?

  Given his current output level

Edward takes 2 hours to cut a lawn and he cuts 100 lawns per year. He uses solar powered equipment and could be sold anytime for $20,000. Edward could earn $20.00 per hour as a pedicurist. The interest rate is 10%. Given his current output lev..

  Determine the total number of occurrences

Write a javascript program that inputs several lines of text and uses String method index Of to determine the total number of occurrences of each letter of the alphabet in the text. Uppercase and lowercase letters should be counted together. Store..

  What is purpose and significance of a county general plan

What is the purpose and significance of a county or city general plan? Do you agree with the seven required general plan elements? Should other elements be required? Why/why not? If you believe additional plan elements are required, what are they ..

  Explain the theory that education acts as a signaling device

Explain the difference between inferior goods and normal goods. As a developing economy experiences increases in income (measured by GDP), what do you predict will happen to the demand for inferior goods. Explain the theory that education acts as a..

  Calculate the manager net salary for october

National Insurance deduction in October is 6¾% calculated on the total of monthly gross salary plus bonus. Income Tax deduction in October is £430. Calculate the manager's net salary for October.

  Pricing by monopolistic competition

Assume there are only two automobile companies, Ford and Chevrolet. Ford believes that Chevrolet will match any value it sets, but Chevrolet too is interested in maximizing profit.

  Collapse of bear stearns

What is the Fed Funds rate and what happened to the Fed Funds rate in the days following the collapse of Bear Stearns and then of Lehman Brothers?

  What is firm a marginal cost curve

Two large firms A and B operate in a market. Firm A  short run cost demand curve is: TC=500,000-1000Q+100Q^2.  The Total demand curve : P=40,000-20.50Q a) What is firm A Marginal cost curve?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd