How much deposit the bank keep in reserves

Assignment Help Microeconomics
Reference no: EM13738551

1. Remembering that currency in a bank's vault is not considered part of the money supply, describe why a consumer depositing $1000 in currency (part of M1) in a bank account and receiving a demand deposit (also part of M1) in the amount of $1000 in exchange does not change the money supply (M1).

2. Assuming the reserve ratio is 10%, how much of the $1000 deposit must the bank keep in reserves? How much can it loan out?

3.Suppose the Federal Reserve sells a bond for $1000. The money goes from ___________ (the Fed or the public's hands) to _____________ (the Fed or the public's hands) and the amount of currency in the public's hands __________ (decreases or increases)

Reference no: EM13738551

Questions Cloud

Discuss current and proposed real property tax reforms : Discuss current and proposed real property tax reforms. Do you think that the real property tax is regressive and a burden on lower-income people?
Training design worksheet : After you have completed the Training Design Worksheet, use that information as a guide to develop a 15-20 slide PowerPoint presentation to present your training ideas to the client company. Make sure to include detailed speaker's notes which prov..
Discuss how you would begin the job analysis of the position : Discuss how you would begin the job analysis of the position, Identify at least 2 areas where the employer would want to make sure that the person used to fill the position has the qualifications to provide the best services to the company's client..
Team in transition : Al-tech Manufacturing has seen a downturn in the market which resulted in a reduction of sales and net income.  In a move to improve profitability and reduce overall administrative expenses, senior management has decided to merge with a former riv..
How much deposit the bank keep in reserves : How much of the $1000 deposit must the bank keep in reserves? How much can it loan out
Demonstrates the significance of the work undertaken : Post an executive summary of your Comprehensive Project in the body of a post in this discussion (please do not use attachments). An Executive Summary is a one-page document that outlines the purpose, process, findings, discussion, and findings of..
What do they do that encourages your loyalty : Think of your favorite stores. What do they do that encourages your loyalty? What do you like about the in-store experience? What further improvements would you suggest
Ethical norms and conventions of the organization : Power can also be abused and utilized to achieve personal agendas apart from ethical norms and conventions of the organization.
How did women help create their own identities : Women in the 17th and 18th centuries were in difficult position but they were far from powerless. How did women help create their own identities and what obstacles did they have to overcome?

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