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Suppose Fred deposits $8,000 in cash into his checking account at the Bank of Bonzo. The Bank of Bonzo has no excess reserves and is subject to a 5 percent required reserve ratio.
a. Show this transaction in a T-account for the Bank of Bonzo.
b. Assume the Bank of Bonzo makes the maximum loan possible from Fred's deposit to Clarice and show this transaction in a new T-account.
A open economy has a marginal propensity to import equal to .2 and a marginal propensity to consume equal to .7. Determine propensity to save of this economy?
Illustrate what school of thought would make this suggestion, and how do economists of that school justify that prescription.
Does this change in the value of the dollar make imports cheaper or more expensive for Americans? Are American exports cheaper or more expensive for importers of U.S. goods in Japan? Illustrate by showing the price of a U.S. e-reader in Japan, before..
Calculate the appreciation or depreciation of the US dollar relative to the Japanese yen.
Why do business departments have more money than otherdepartments? What economic measures can be taken to relieve thedifferences in salaries?
Suppose your marketing department does a survey of potential users and finds that these users place the following values on the two versions of your software.
The scenario is that I am going to open restaurants in China. One in Shanghai and one Beijing. These restaurants will serve healthy food such as salads, sandwiches, pizza, soup,
What happens when there is a surplus of imports brought into the U.S.? Cite a specific example of a product with an import surplus, and the impact that has on the U.S. businesses and consumers involved.
Interferences such as rent controls and farm value supports reduce efficiency of markets. In terms of the balance of Qd and Qs, explain why do they do this?
Changes in the reserve ratio, open market operations, and changes in the discount rate are all tools used by the Fed to
If planned investment increases by nine dollars and disposable income increases by ten dollars, what is the marginal propensity to consume?
explain what will happen to real wage rate The real wage would decrease since there would be a larger working population. The real wage would increase as productivity increases.
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