Assume that commercial banks do not hold excess reserves. The banking system has $30 million in reserves and has a desired reserve ratio of 10 percent. The public holds $50 million in currency. Then the public decides to withdraw $20 million in currency from the banking system. If we want to keep the money supply unchanged, what should be the new reserve ratio? Select one: O a. 11.235 percent cross out O b. 3.571 percent cross out O c. 10.897 percent cross out O d. 8.5 percent cross out O e. None of the above cross out

Q: Currently, your bank holds $8 million in deposits at a 4% interest rate. However, you need to…

A:

Q: Creative Homework/Short Project Assume that you arean entrepreneur who runs a bakery that sells…

A: What is Price Elasticity? Price elasticity is the measurement of how quantity demanded of a good…

Q: Imagine you are a bank manager. Currently, your bank holds $8 million in deposits at a 4% interest…

A: Interest rate elasticity of savings is given by the formula, E = Change in DepositsOriginal…

Q: In 2019, a ski resort increased the prices it charged for one-day ski passes and season passes. If…

A: Total Revenue is the product of price and quantity  Elasticity measures the change in quantity due…

Q: The price elasticity of demand for a product is 0.76. A percentage change in price is 13%. The…

A: The change in quantity divided by the average of the initial and final quantities divided by the…

Q: > Why might your initial elasticity (PED) and (PES) calculations be unreliable?

A: The initial elasticity (PED) and (PES) calculations are unreliable.

Q: Why the contract can lower transaction costs?

A: Transaction costs are the costs associated with purchasing or selling a product or service. The…

Q: How do I calculate new Qs for supply and demand?

A: A market demand schedule and market demand curve helps to determine the change in demand. A market…

Q: The hourly demand for music downloads is given by: Qd = 500-100P where Q is the number of songs…

A: Price elasticity of demand: It measures the percentage change in the quantity demanded for a 1%…

Q: If the market for hula hoops is characterized by a very inelastic supply curve and a very elastic…

A: The issue addressed in this case is analyzing an outward shift of the demand curve for hula-hoops,…

Q: From the graph it is clear that the demand for gasoline is relatively • Jand the supply for gasoline…

A: Elasticity is the ratio of the percentage change in the quantity demanded because of the percentage…

Q: Bob of Bob's Burgers used to charge $2.20 for a certain hamburger and sold 4000 units. When he…

A: The demand curve shows the inverse relationship between price and quantity demanded. The price is…

Q: Mr. Jones sells scrapbooking materials. He charges $20 per album and sells 120 albums month at this…

A: Total revenue = Price x Quantity = PxQ

Q: Will the demand for pay TV shows increase in the future

A: The demand for pay TV shows will increase in the future because:

Q: When the price of a gallon of milk increases from $6 to $8, quantity demanded decreases to 27…

A:

Q: method of bargaining impatience measurements

A: Bargaining is the mechanism that the player tries to fix a contract by. This method is usually…

Q: Can sports betting be an occupation? How is sports gambling different than other forms of gambling?

A: The question is asking whether sports betting can be considered as a full-time job or occupation and…

Q: The price elasticity of demand for a product is 0.51. A percentage change in price is 17%. The…

A: Given data: Price elasticity of demand is 0.51 Percent change in price is 17% Initial quantity of…

Q: What is the nature of elasticity?

A: Elasticity is an economic measure of how sensitive an economic factor is in response to another…

Inflation and Purchasing Power Theory

In economic terms, Inflation refers to the increase in the costs of various commodities which are used in daily lifestyle like food, clothes, transport, etc. over a specific time. It may lead to a fall in the purchasing power of the people and also affects the exchange rate of the currency because of the price increase. As the purchasing power falls the unit of the currency in the economy falls. When the prices of the commodities are decreased, then the purchasing power of the consumers will rise, then it will lead to deflation and changes the currency of the base economy to that of the foreign economy which will lead to change in exchange rates.