Calculate the simple money multiplier

Assignment Help Business Economics

Reference no: EM13979189

Given an initial deposit of $500,000, and a required reserve ratio of 15%:

a) Calculate the simple money multiplier:

b) Calculate the total change in the money supple from this deposit:

c) If the required reserve ratio was decreased to 14%, calculate the simple money multiplier:

d) Calculate the total change in the money supple from the deposit based on the new RRR:

e) Is the decrease of the required reserve ratio from 15% to 14% an example of expansionary monetary policy of contractionary monetary policy? Explain.

Reference no: EM13979189

Questions Cloud

Draw and carefully explain how consumer surplus : Draw the domestic market for airplanes. Show the effect of the economy opening up to trade, with the world price below the equilibrium price in autarky. Draw and carefully explain how consumer surplus, producer surplus and total surplus are affected ..

Internet banking likely to have on the demand for cash money : What impact is increased internet banking likely to have on the demand for cash money? Be specific and detailed in your answer.

Which of data sets are approximately normally distributed : What can you say about your three stocks with respect to daily closing prices and daily changes in closing prices? Which, if any, of the data sets are approximately normally distributed?

Determine the smallest magnitude of acceleration : Perhaps he will arrive early? Then he did not need to exert himself quite so much! In this case, what is the smallest magnitude of acceleration that would still get him to class in time (the answer may be in either mm/s2, or in m/s2).

Calculate the simple money multiplier : Given an initial deposit of $500,000, and a required reserve ratio of 15%: Calculate the simple money multiplier: Calculate the total change in the money supple from the deposit based on the new RRR: Is the decrease of the required reserve ratio fro..

What is the electric current flowing in the circuit : What is the electric current flowing in the circuit? What is the power dissipated by the external resistor? How much power is dissipated inside the battery?

Validate orthodox or heterodox theory of economic process : Economist L. Randall Wray writes in a paper, “[t]his approach, [M-C-M’], is suited to the study of realworld capitalist economies that can be characterized as operating at less than full capacity as the normal situation]. Give two common sense reason..

Comments on both micro and macro environmental forces affect : Choose an organization form the following Industries: Australian Dairy farmers, Hybrid car (choose one brand), Australian wool industry, Business schools in Australia, HSBC, Bank of China, Organic food, Health and fitness industry. Clear and concise ..

Confronted with a pricing problem : uppose as a manager of a profitable department store you are confronted with a pricing problem. You have two types of customers: a high-end type that are willing to pay a price of $25 for a pair of Levis Jeans, and a low-end type customer that are wi..

User Account

All Pages