Expand its loans by a maximum

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Reference no: EM139517

Q1. Assuming the ABC bank has excess reserves of %5,000, it could prudently expand its loans by a maximum of?

Q2. The equation for a demand curve has been estimated to be Q = 100 - 10P + 0.5Y where Q is quantity, P is price, also Y is income. Assume that P = 7 also Y = 50.

a. Interpret the equation.

b. Illustrate what is price elasticity at P = 7 also arc elasticity at the interval between P = 6 also P=7.

c. Illustrate what is income elasticity at Y = 50 also arc elasticity at the interval between Y = 50 also P=60.

d. Now assume that income is RM70. Illustrate what is the price elasticity at P = 8? Also, compute arc elasticity at the interval between P=7 also P= 8.

Reference no: EM139517

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