User Account

All Pages

By how much is the senators bank over- or under-reserved

Assignment Help Macroeconomics
Reference no: EM131344546

Q1. The following table shows the balance sheet for the Senators' Bank, which has a target reserve ratio of 8 percent.

Assets

Liabilities/Equity

Reserves

$2900

Demand deposits

$30000

Loans

26000

Shareholder's equity

5000

Securities

4200

 

 

Fixed Assets

1900

 

 

Totals

$35000

Totals

$35000

a) By how much is the Senators' Bank over- or under-reserved?

b) If the bank makes a loan in an amount equal to the excess reserves and the borrower writes a cheque (for the full amount of the loan) to another customer of the bank who then deposits it, what will be the new amount of excess reserves?

c) If instead, the cheque written by the borrower is cleared against the Senators' Bank (the cheque was written to a customer of another bank), what will now be the amount of excess reserves?

Q2. Answer the questions below based on the data in the following table. (All figures are in $billions.)

Total currency issued by the Bank of Canada - $45

Total personal savings deposits & personal term deposits - 270

Total demand deposits - 65

Deposits of the federal government at the Bank of Canada - 54

Currency held by the commercial banks - 8

Government bonds owned by the public - 165

Non-personal fixed-term deposits (certificates of deposit) - 105

a) What is the amount of currency in circulation?

b) How much larger is M1 than the amount of currency in circulation?

c) How much larger is M2 than M1?

d) How much larger is M3 than M2?

Reference no: EM131344546

Questions Cloud

Calculate the exit diameter of the nozzle : A flow rate of 1 kg/s of air at 30 atm and 20?C is to be measured with a venturi and an orifice. Select appropriate size devices and specify suitable pressure instrumentation for each.
Post a brief description of an ethical conflict : Human services professionals are often faced with ethical dilemmas as they balance client needs with the rules and regulations of organizations and systems. To help maintain this delicate balance and guide practice decisions, professionals must fo..
Discuss in detail the qualities that a leader must exhibit : Leadership via "vision" is necessary for success. Discuss in detail the qualities that a leader must exhibit in order to be considered visionary and how these qualities may be learned and developed.
What exit diameter should be designed for the nozzle : An airflow of about 1.5 kg/s at 20 atm and 50?C (stagnation conditions) is to be measured using a sonic nozzle. What exit diameter should be designed for the nozzle?
By how much is the senators bank over- or under-reserved : By how much is the Senators' Bank over- or under-reserved? If the bank makes a loan in an amount equal to the excess reserves and the borrower writes a cheque (for the full amount of the loan) to another customer of the bank who then deposits it, w..
Draw the best lewis structure for the chlorate ion : Draw the "best" Lewis structure for the chlorate ion consistent with formal charge considerations. Show each atom individually; show all lone pairs as lone pairs. If any resonance forms are present, show each one. Evaluate all formal charges and s..
Describe the resistance characteristics of thermistors : Distinguish between the Fahrenheit and Celsius temperature scales.
Is the circuit overdamped critically damped or underdamped : Find vC (t) and iL(t) for t ≥ 0.- Is the circuit overdamped, critically damped, or underdamped?- Use Multisim to validate your results.
State the law of intermediate temperatures for thermocouple : Why does the resistance of thermocouple wires not influence a temperature reading when a potentiometer is used?

Reviews

Write a Review

Macroeconomics Questions & Answers

  What if the manager believed rates would fall in the next

If a bank manager was quite certain that interest rates were going to rise within the next six months, how should the bank manager adjust the bank"s six-month repricing gap to take advantage of this anticipated rise?

  Pareto efficiency in two person

Consider the following two good pure exchange economy: Alfred's utility function is U A (x, y) = min{x, y} and Bob's utility function is U B (x, y) = max{x, y}.

  Price consumption curve for good

Suppose an individual spends all his income on only two goods, good X and good Y. Moreover, suppose that you were asked to derive his price consumption curve for good Y. Which of the following would be allowed to vary?

  Excess supply of money leads to balance-of-payments deficit

In a situation of a fixed exchange rate, explain why, in the monetary approach, an excess supply of money leads to a balance-of-payments deficit. Why is the deficit only temporary? How might advocates of the monetary approach explain a long-lasting d..

  Cost-minimizing mix of capital and labor

Is Doughdaddy using the cost-minimizing mix of capital and labor to produce doughnuts? If he wants to increase output, should he use relatively more capital or relatively more labor?

  Why is a country appreciation of its currency

Why is a depreciation of a country currency not necessarily a bad thing?.

  In this problem we are going to use the money market to

in this problem we are going to use the money market to model two real world eventsi a portfolio shock to money demand

  Determining the market-basket analysis

Suppose you work at Costco or another major, national, big-box store, and you do a market-basket analysis and identify the 25 pairs of items in the store that have the highest lift and the 25 pairs of items that have the lowest lift.

  When bill clinton took office in january 1993 he faced two

when bill clinton took office in january 1993 he faced two major economic problems a large federal budget deficit and

  Describe the way courts have ruled regarding reserve clause

A baseball player earns $1,650,000 a year. Scully estimated that an increase by 1 in the number of games won raises revenues by $286,911. Explain to the general manager of this player's team how you would decide if the player was overpaid,

  Explore which position you support and defend your position

Evaluate both the advocates' position and the critics' position. Determine which position you support and defend your position. Cite a minimum of 3 peer-reviewed sources not including your textbook.

  Broker rate of commission on sale

At the end of 3 years, the shares were sold for £4.10 per share. The broker's rate of commission on sale was 0.85%, and was calculated on the nominal value.

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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