Find the immediate effect on chartered bank reserves and

Assignment Help Microeconomics
Reference no: EM13387557

Assume that the banking system has no excess reserves. The combined balance sheet of all chartered banks is (in million of dollars)

ASSETS

LIABILITIES

Reserves    $15,000

Securities and loans $135,000

$150,000   Deposits

$150,000

$150,000

Suppose the general public purchase $500 million in government bonds and pay for them by drawing cheques on their chartered bank deposits.

(i) Calculate the (target) reserve requirement. 

(ii) What is the immediate effect on chartered bank reserves and deposits?  Provide the balance sheet.

What is the ultimate effect on chartered bank reserves, deposits, and loans?  Provide the final balance sheet.

Reference no: EM13387557

Questions Cloud

One year ago you bought a stock for 3648 a share you : 1.one year ago you bought a stock for 36.48 a share. you recently received a dividend of 1.62 per share and sold the
In december 2013 the government announced the terms of : in december 2013 the government announced the terms of reference for the financial system inquiry. it has been 16 years
Now assume you are in a perfect market with only corporate : now assume you are in a perfect market with only corporate taxes added. cde corp. is all equity financed with 5000
Sudson washer and dryer service is in the business of : sudson washer and dryer service is in the business of leasing used washers and dryers to apartment landlords for a
Find the immediate effect on chartered bank reserves and : assume that the banking system has no excess reserves. the combined balance sheet of all chartered banks is in million
John bro llc is a gold mining company operating a single : john bro. llc is a gold mining company operating a single mine. the present price of gold is 300 an ounce and it costs
Bull how will you explain this situation to the project : a military project specifies a lighting fixture that is unique and is the centerpiece for a large conference room. the
Given that you are rolling your services out in a foreign : given that you are rolling your services out in a foreign country there will be a need to learn from other companies
Which of the following would cause average inventory : directions answer the following five questions on a separate document. explain how you reached the answer or show your

Reviews

Write a Review

Microeconomics Questions & Answers

  The free rider problem

Question: Explain why the free rider problem makes it difficult for perfectly competitive markets to provide the Pareto efficient level of a public good.

  Failure of the super committee is good thing for economy

Some commentators have argued that the failure of the “Super committee” is good thing for the economy?  Do you agree?

  Case study analysis about optimum resource allocation

Case study analysis about optimum resource allocation: -  Why might you suspect (even without evidence) that the economy might not be able to produce all the schools and clinics the Ministers want? What constraints are there on an economy's productio..

  Fixed cost and vairiable cost

Questions:  :   Which of the following are likely to be fixed costs and which variable costs for a chocolate factory over the course of a month?  Explain your choice.

  Problem - total cost, average cost, marginal cost

Problem - Total Cost, Average Cost, Marginal Cost: -  Complete the following table of costs for a firm.  (Note: enter the figures in the  MC   column  between  outputs of  0 and 1, 1 and 2, 2 and 3, etc.)

  Oligopoly and demand curve problem

Problem based on Oligopoly and demand curve,  Draw and explain the demand curve facing each firm, and given this demand curve, does this mean that firms in the jeans industry do or do not compete against one another?

  Impact of external costs on resource allocation

Explain the impact of external costs and external benefits on resource allocation;  Why are public goods not produced in sufficient quantities by private markets?  Which of the following are examples of public goods (or services)? Delete the incorrec..

  Shifts in demand and movements along the demand curve

Describe the differences between shifts in demand and movements along the demand curve. What are the main factors which can shift the demand curve? Explain why they cause the demand curve to shift. Use examples and draw graphs to support your discuss..

  Article review question

Article Review Question: Read the following excerpts from the article "Fruit, veg costs surge' by Todd, Dagwell, published in the Herald on January 25th 2011 and answer questions below:

  Long-term growth, international trade & globalization

Long-term Growth, International Trade & Globalization:- This question deals with concepts such as long-term growth, international trade and globalization. Questions related to trade deficit, trade surplus, gains from trade, an international trade sce..

  European monetary union (emu) in crisis

"Does the economic bailout of Spain and Greece spell the beginning of the end for the European Monetary Union (EMU)?"

  Development game “settlers of catan”

Read the rules of the game, the overview and the almanac for the Development Game "Settlers of Catan"

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