Calculate the total money creation in the economy

Assignment Help Macroeconomics
Reference no: EM1394017

Task 1 - Commercial banks in United Economy have total deposits of AED 300 billion. Their reserves are AED 15 billion, two- thirds of which are with the Central Bank as deposits. There are AED 30 billion notes outside the banks. There are no coins!

Calculate-

a) The monetary base.

b) The banks' reserve ratio.

c) Currency drain as a % of deposits.

Task 2 -Suppose Mr. Y deposits AED 100,000 into a one-year Certificate of Deposit at 5% interest. The Central Bank sets the reserve ratio for the banks at 10%.

A) Illustrate how the banks create money with the help of given information.

B) Calculate the total money creation in the economy with the help of formula.

Reference no: EM1394017

Questions Cloud

Random-sample of registered voters : Pollsters try to determine whether or not a person is a "likely voter" before they count their opinion in a poll. If we assume 40% of the registered voters will actually vote, in a random sample of 100 registered voters we can be 95% confident tha..
Degrees of freedom : A rental agent claims that the mean monthly rent, mu, for apartments on the east side of town is less than $725. A random sample of 13 monthly rents for apartments on the east side has a mean of $724
Ingestion of a virulent poison tetradotoxin : Consumption of puffer fish is often deadly. This is because of ingestion of a virulent poison tetradotoxin (TTX) that is concentrated in fish organs.
Estimating risk and association : A comparison group consisted of 5,055 children who had received no such treatment (brothers and sisters of the children who had received radiation treatment).
Calculate the total money creation in the economy : Calculate the total money creation in the economy with the help of formula and how the banks create money with the help of given information.
Activation of metabotropic glutamate receptors : Activation of metabotropic glutamate receptors in neurons is often coupled to the activation of phospolipase C PLC.
Determine optimization modeling : Woodco manufactures tables and chairs. Each table and chair must be made entirely out of oak or entirely out of pine. A total of 150 board feet of oak and 210 board feet of pine are available.
Balances that fallow a normal curve : A large population of overdue bills has balances that fallow a normal curve. When we take a sample of 100 of these the average is $500 and the standard deviation is $100.
Distinguish personal liability exposure-different lawsuits : Distinguish your personal liability exposure as the result of different lawsuits. In one paragraph, explain how you might limit liability exposure in each particular business organizational form.

Reviews

Write a Review

Macroeconomics Questions & Answers

  Calculate marginal cost and average total cost

Given below is a table with total information for a firm in a perfectly competitive industry.

  Elucidate the difference among a monopoly and an oligopoly

Elucidate the difference among a monopoly and an oligopoly, the welfare effects of monopoly.

  Explain how are the slope of a production possibilities

Explain how are the slope of a production possibilities frontier and the opportunity cost of the goods related.

  Inflation rate and growth rate of real and nominal gdp

Suppose that natural real GDP is constant. For every 1 percent increase in the rate of inflation above its expected level, firms are willing to increase real GDP by 2 percent. Draw the new short-run Phillips Curve.

  Calculation of herfindahl-hirschman index

From this information, can you devise a general rule explaining how the Herfindahl-Hirschman index is affected when exactly two firms in the market merge? (Hint: compare a2 + b2 with (a + b) 2)

  Nation economy retrenched in the wake of a global financial

In 2008-2009, the nation economy retrenched in the wake of a global financial crisis. Did the globalization of capital markets contribute to this crisis.

  Predictions for nominal wage increases and productivity grow

Given the following predictions for nominal wage increases and productivity growth, state your forecast for inflation (assume this is all the information available to make the forecast).

  Compute nominal payback period, net present value

A machine cost $4,000. It lasts two years and has no salvage value [that is, it has no value at the end of those two years of use]. In every year, it produces $ 2400 in income. Should the company invest in machine if the interest rate is 10 percent?

  Macroeconomics fourth canadian edition

Answer the following questions as these general questions pertain to the specific issue selected.The questions that you will cover with respect to your choice of broad social issue in the paper are given.

  Determine effects of newly printed currency

Fed Chairman Ben Bernanke finally confess that the Fed has been printing more new currency over last some months to help stimulate the economy and more recently noted economy may not yet be out of woods,

  Full employment unemployment rate

Explain why would you expect inflation rate to increase if the actual unemployment rate refused to a level lower than the "full employment" unemployment rate.

  Utility-maximizing choice of bridget

Bridget has a limited income and consumes only wine and cheese; her current consumption choice is four bottles of wine and 10 pounds of cheese.

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