Reference no: EM13183077
The economy of the Village of Pantherville contains 10,000 $1 bills. [Briefly explain how you arrived at each of your answers.]
a) If people in Pantherville hold all money as currency, what is the quantity of money?
b) If people hold all money as demand deposits and the Bank of Pantherville maintains 100% reserves, what is the quantity of money?
c) If people hold equal amounts of currency and demand deposits and the Bank of Pantherville maintains 100% reserves, what is the quantity of money?
d) If people hold all money as demand deposits and the Bank of Pantherville maintains a reserve ratio of 10%, what is the quantity of money? [Hint: What is the money multiplier with a reserve ratio of .1?]
e) If people hold equal amounts of currency and demand deposits and the Bank of Pantherville maintains a reserve ratio of 10%, what is the qualtity of money? [This is more challenging, but some simple algebra can be of assistance. Consider the following equations:
1) M = C + D (quantity of money equals currency + deposits)
2) C = D (currency must equal demand deposits)
3) 10*($10,000 - C) = D (total demand deposits equals the money multiplier times available reserves. In this instance total available reserves are (10,000 - currency holdings)
Substitute (3) into (2) and solve for C
Then once you have C, you can solve for M given that C must equal D.]
|
Problems like the flu-hurricanes-smallpox-mumps or rabies
: Is it the government's job to protect us from other problems like the flu, hurricanes, smallpox, mumps, or rabies? If it is the government's job to protect us from these problems, then what is the government's role in that protection? Isn't this wher..
|
|
How much silk will american consumers purchase
: Consider the costs of the new American producers who produce silk only after the tariff is inplace. What area on the graph shows the amount by which their total costs are higher than thetotal revenue that foreign producers would receive to produce..
|
|
What is meant by data independence
: What is meant by data independence? Explain your answer and identify two benefits of separating application software from the database management system.
|
|
About the scientific analysis of language
: Structuralists grew more and more confident about the scientific analysis of language. what does it mean and why did they think like that?please introduce some references for me to read about the question.
|
|
What is the money multiplier with a reserve ratio
: If people in Pantherville hold all money as currency, what is the quantity of money? b) If people hold all money as demand deposits and the Bank of Pantherville maintains 100% reserves, what is the quantity of money? c) If people hold equal amount..
|
|
Business ethic models and social responsibility
: What are the differences between business ethic models and social responsibility of corporations Do you see these differences are being significant? Or could it be argued that there is no real difference or perhaps that CSR is just a type of business..
|
|
What is the firms efficient scale of production
: d) Which input bundle represents efficient production of 100 units of output if the rental paid to capital is $25 and he wage paid to labor is $50? Round any decimals to the nearest hundredth. e) Derive the firm's cost function using the rental and..
|
|
How does complexity of an ecosystem influence the change
: How does the complexity of an ecosystem influence the changes (rate, frequency, duration) within a habitat. How might scale (temporal/ spatial) influence ecosystem complexity?
|
|
What is the firms total cost function
: A firm has two production plants where they produce the same product. The cost function at plant #1 is A) If the firm wants to produce Q total units of output, what fraction of Q will be produced at plant #1? What fraction at plant #2? Show all wo..
|