Reference no: EM131108336
A bank currently has $70,000 in deposits, $6,000 in cash in the vault, $12,000 on deposit with the Fed, and $7,000 in government securities. The required reserve ratio is 20 percent. Answer these questions
1) What is the maximum amount the money supply can increase, assuming this bank is the only bank in the system that has excess reserves?
2) An individual deposits a $750,000 check into the bank. That individual had just converted foreign currency into dollars so the $750,000 was not in the money supply before the deposit. What is the maximum size loan the bank can make once the check clears?
3) What is the maximum amount the money supply can increase as a result of the $750,000 deposit?
4) If these expansions in the money supply happen, what effect will it have on aggregate demand, GDP, and employment?
5) What could keep the expansions from happening?
|
Under which assumptions is this sound economic argument
: Recycling paper is often praised because it allegedly (ostensibly) helps to preserve forests. Under which assumptions is this a sound economic argument? Are these assumptions realistic? What happens if they are abandoned?
|
|
Identifying user stories and use cases
: To prepare for this Application, read Chatper 3, "Identifying User Stories and Use Cases: Developing a Use Case Diagram" on page 87. You may complete this assignment with the Violet UML editor presented in Chapter 3 or any other appropriate UML de..
|
|
Describe the difference between common fears and a phobia
: Go to the Centers for Disease Control and Prevention (CDC) website and review the available information on suicide (Google: CDC Suicide Prevention). Describe the current definition of suicide. Explain the difference between completed suicide, suic..
|
|
Who was that king
: In 1885 the Belgian King had acquired the state of Congo as his personal possession. In 1908 the Belgian State took it over from him. Who was that King
|
|
What could keep the expansions from happening
: A bank currently has $70,000 in deposits, $6,000 in cash in the vault, $12,000 on deposit with the Fed, and $7,000 in government securities. The required reserve ratio is 20 percent. f these expansions in the money supply happen, what effect will it ..
|
|
Predict from the point of view of adverse selection
: Predict from the point of view of adverse selection and moral hazard how the following conditions will affect behavior.
|
|
What is the annualized loss expectancy
: A company experiences an average of 25 malware outbreaks per year. Each event costs the company $10,000 to clean up. What is the annualized loss expectancy (ALE)?
|
|
Adopts new law that forces landlords
: Imagine the German parliament adopts a new law that forces landlords to give tenants six months notice before evicting them. Up to the reform standard apartments were rented for 500€ per month. Explain - verbally and graphically - the effect on the h..
|
|
Describe from the origins or history of the mental disorders
: Describe the psychological theory or theories that relate to the mental disorders, especially in the areas of diagnosis and treatment. Describe the difference, if any, in age of onset and diagnostic criteria based on gender.
|