4.lf the Fed set the required reserve requirement ratio to be 0.02, bank A wishes to maintain 0.03 dollar in excess reserve for every 1 dollars in transaction deposit. What is the deposit multiplier? |(Required) If bank A found themselves with 10 in excess reserve, what is the maximum amount of new deposits (loan) created by the banking system? (Required)

4.lf the Fed set the required reserve requirement ratio to be 0.02, bank A wishes to maintain 0.03 dollar in excess reserve for every 1 dollars in transaction deposit. What is the deposit multiplier? |(Required) If bank A found themselves with 10 in excess reserve, what is the maximum amount of new deposits (loan) created by the banking system? (Required)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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5. Assume that the required reserve ratio is 20%. If the Fed sells $10 million worth of government bonds from the public, the maximum change in the money supply is: a) -$50 million. (b) -$20 million. (c) $20 million. (d) $50 million.
2. Suppose that in 2018 customers deposit $4,000 into their bank accounts. Based on the extended money multiplier calculated in part (1), calculate the total amount which the money supply in the banking system will eventually increase to. Show all steps involved in the calculation. part 1 answer DRR = Ratio (4% or 0.04) CDR = % of money in wallets (3% or 0.03) = (1 + 0.03) / (0.04 + 0.03) = 1.03 / 0.07 Answer = 14.71 Therefor Every $1 in the bank will allow the bank to create $14.71
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(Table: Balance Sheet) Refer to the information in the tableBalance Sheet. If the reserve ratio is 25% and the bank is exactly meeting its reserve requirement and the bank is exactly meeting its reserve requirement, loans are: A) $60,000. B) $15,000. C) $5,000. D) $80,000.
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I only need Help with part (B)
Refer to Figure 11.3. If the demand for money curve will shift from Md1 to Md0, the equilibrium interest rate will Group of answer choices increase from 5% to 7%. decrease from 7% to 5%. increase from 5% to 10%. remain at 7%.
1. Why does the public want to hold some of its wealth as money? Answer the following: (a) What is the basic determinant of the transactions demand? The level of_ - The higher this level, the ( smaller, greater) the amount of money demanded for transactions. (b) the asset demand for money? The level of - The higher this level, the (smaller, greater ) the amount of money demanded as an asset.
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5. Consider the T-table of the Bank of Boston. Suppose the Federal Reserve Bank buys an additional $2 million in government bonds from the Bank of Boston. Assume (1) the required reserve ratio is 10 percent, and (2) the Bank of Boston issues all excess reserves in loans (I.e., there are no excess reserves). The new money supply equals $ million. Submit Balance sheet of the Bank of Boston Liabilities -55,000,000 Checkable deposits +$5,000,000 Assets Government bonds Currency (= bank reserves) +$5,000,000 Loans $0
1. What are the total loans off the people’s bank 2. Computer money multiplier 3. Suppose a depositor comes to the bank and withdraw $2000 in cash. How much money supply will be reduced in the economy?
6. Required and excess reserves Suppose that Second Republic Bank currently has $200,000 in demand deposits and $130,000 in outstanding loans. The Federal Reserve has set the reserve requirement at 10%. Second Republic Reserves Required Reserves Excess Reserves (Dollars) (Dollars) (Dollars)