User Account

All Pages

What will happen to banks liabilities

Assignment Help Macroeconomics
Reference no: EM132506972

Imagine that the banking system received additional deposits of $100 million and that all the individual banks wish to retain their current liability ratio of 20%.

a. How much of the $100 million will banks choose to lend out initially?

b. What will happen to banks liabilities when the money that is lent out is spent and the recipients of it deposit it in their banks accounts?

c. How much of these latest deposits will be lent out by the banks?

d. By how much will total deposits eventually have risen, assuming that none of the additional liquidity is held outside of the banking sector?

e. How much of these extra total deposits are matched by (i) liquid assets (ii) illiquid assets?

f. What is the size of the bank multiplier?

g. If one-half of any additional liquidity is held outside the banking sector, by how much less will deposits have risen compared with (d) above?

Reference no: EM132506972

Questions Cloud

Compute the cash provided or used by the activity : Compute the cash provided or used by the activity. A building with the cost of 186,000 and accumulated depreciation of 48,000 was sold for 20,000 gain?
What is impairment loss for the intangible assets for fiscal : What is the impairment loss for the intangible assets for fiscal 2021, following U.S. GAAP? Identifiable intangible assets with a fair value of $80 million
Find the divisions goodwill impairment loss is : Find The divisions goodwill impairment loss is. Assume a U.S. company decides to quantitatively test its goodwill for impairment.
Type of capital between the international centuries : In International level how does capital flow in all of these different centuries using what market and what system also, what type of capital has been treaded
What will happen to banks liabilities : Imagine that the banking system received additional deposits of $100 million and that all the individual banks wish to retain their current liability ratio of 2
Future to pay for current consumption : The U.S. and many other governments spend more then it raises in taxation almost every year. Since 1965 the federal government has balanced
Find how many balls will have to be sold next year : Find If the new plant is built, how many balls will have to be sold next year to earn the same net operating income, $109,000, as last year?
Calculate the rate of inflation if real gdp grows : Given the output ratio is initially 100 and expected inflation is 3.2%, calculate the rate of inflation if real GDP grows by 3.2%.
Find budget hours would reveal total overhead costs of : Find The budget for 28,000 hours would reveal total overhead costs of: (Round your intermediate calculations to 2 decimal places.)

Reviews

Write a Review

Macroeconomics Questions & Answers

  Calculating stock value

Anybody Coal Corporation expects tough economic situations for foreseeable future. Their current beta is 1.2, the risk free rate is 10 percent and the required rate of return on the market is 15 percent.

  Computing the plant level

Why might a firm operating with one plant achieve MEPS and yet not be large enough to achieve MES? (Clue: are all economies of scale achieved at plant level?

  When earning negative economics profit

List and describe the fundamental characteristics of a perfectly competitive market. B) Should a competitive firm ever produce when it is earning negative economics profit Explain why or why not.

  What is ultimate change in governments budget deficit g-t

What is the ultimate change in the government's budget deficit G - T if government spending increased by $10 billion.

  Hours in the economics department

Professors Kubik and Black make up the entire demand side of the market for summer research assistants in the economics department. If Kubik's demand curve is QK = 25 - (1/2)P and Black's is QB = 100 - P. What is the market demand curve for resear..

  How much additional income would the consumer need

How much additional income would the consumer need to reach the prior level of utility at the new prices and How many units of X and Y does the consumer purchase?

  Proceeds with the rest of the application

1. The first step is to enter basic info such as name, email, and phone. 2. The applicant receives a SMS verification code to confirm that the phone number entered is correct. 3. The applicant then enters the code and proceeds with the rest of the ap..

  Revenue during the first year

A person managing a laundry for someone else for $30,000 per year decides for open his own laundry. Revenue during the first year of operation is $100,000 and the expenses are $3,000 for salaries, $10,000 for supplies, $8000 for rent, $2000 for ut..

  Question about hypothetical economy

Suppose that an raise in a household's disposable income from $40,000 to $48,000 leads to an raise in consumption from $35,000 to $41,000,;

  Discussion - difference between real GDP and nominal GDP

Please start with a strong opening discussion of the difference between real GDP and nominal GDP; Why is a large GDP a good thing

  Exchange rate-trade balance and output

Use the IS-LM-FX model to illustrate how each affects the exchange rate, trade balance, and output.

  Explain changes in productivity due to expansion

Explain carefully in terms of production theory why it might be that no amount of "cracking down" can increase worker productivity at CF&D.

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd