If you take $100 out of your piggy bank and deposit it

Reference no: EM13751147

1.If you take $100 out of your piggy bank and deposit it in your checking account, how did M1 change? Did M2 change? If the deposit will be loaned under 20 per cent reserve ratio, what is the change in M1 and M2 as a result of $100 into the banking system?

2.A bank has deposits of $400. It holds reserves of $50. It has purchased government bonds worth $70. It has made loans of $300. Set up a T-account balance sheet for the bank, with assets and liabilities, and calculate the bank's net worth.

3-1)Define money multiplier.

3-2)When the reserve ratio will be up, how about the size of money multiplier? Is that larger or smaller?

3-3)Explain what will happen to the money multiplier process if there is an increase in the reserve requirement?

4. If the reserve ratio is 4 per cent, what is a total increase in money supply when there is a new deposit of $500?(Assume there are multiple loans with the new deposit).

Reference no: EM13751147

Questions Cloud

Explain why solution would help the middle-income customer : Select a recommendation from the two creative solutions - Explain why the solution would help the middle-income customer. Provide credible sources to support your decision.

What were the main causes of the great depression : What were the main causes of the Great Depression of the 1930s? Why did the Depression cause such severe unemployment in industrialised countries? Why were governments around the world so ineffective in dealing with this crisis?

Analyze the types of measures used for decision making : Analyze the types of measures used for decision making. Analyze the five key competitive priorities and their relationship to operations strategy. Analyze different types of technology and their role in manufacturing and service operations.

If you take $100 out of your piggy bank and deposit it : 1.If you take $100 out of your piggy bank and deposit it in your checking account, how did M1 change? Did M2 change? If the deposit will be loaned under 20 per cent reserve ratio, what is the change in M1 and M2 as a result of $100 into the banking s..

A bakery on the main downtown street : You recently acquired a bakery on the main downtown street. There is another bakery not far away. Otherwise, you face no real competition. At this point, you are still unclear about the personality and management style of the owner of the other ba..

Computing the indirect cost allocation percentages : Adjust your (cost drivers) activity statistics in computing the indirect cost allocation percentages as you step down through the cost centers.

Discusses how to enter a foreign market : Discusses how to enter a foreign market; what are the steps needed and the essential elements for success. Compare/contrast two different entries.

Describe business uses for mobile/smart phone technologies. : Describe at least five business uses for mobile/smart phone technologies. Discuss at least four of the characteristics of m-commerce that makes it beneficial to businesses and consumers

User Account

All Pages