Consider a withdrawal from the Canadian banking system of $2,500. Suppose that all commercial banks have a target reserve ratio (v) of 10 percent and there is no cash drain. a. The first round has been completed in the table below. Recalling that the new loans in the first round become the new deposits in the second round. Using the same approach, complete the table. (Round your responses to the nearest dollar. If you have rounded a number and need to use it in another calculation, you should use this rounded value. For example, if the new loans in the second round are found to be -$1,255.76 and rounded to -$1,256, then if at some later point you need to use this value, you should use -$1,256, not-$1,255.76.) Round & in Deposits -$2,500 First Second Third Fourth AReserves $250 ALoans -$2,250

Consider a withdrawal from the Canadian banking system of $2,500. Suppose that all commercial banks have a target reserve ratio (v) of 10 percent and there is no cash drain. a. The first round has been completed in the table below. Recalling that the new loans in the first round become the new deposits in the second round. Using the same approach, complete the table. (Round your responses to the nearest dollar. If you have rounded a number and need to use it in another calculation, you should use this rounded value. For example, if the new loans in the second round are found to be -$1,255.76 and rounded to -$1,256, then if at some later point you need to use this value, you should use -$1,256, not-$1,255.76.) Round & in Deposits -$2,500 First Second Third Fourth AReserves $250 ALoans -$2,250

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Suppose that the following information describes the banking system in Belarus. Currency = $940 billion Checking Deposits = $1,475 billion Total Reserves = S198 billion Required Reserves = $177 billion (a) Calculate the level of the monetary base (MB) in the banking system of Belarus. (b) Given the above data calculate the money multiplier (m). Round vour answer to 2 decimal places.
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1. Suppose the interest rate prevailing in the market is 6.5%. Suppose also that an individual's income is P30,000 half of which is invested in interest bearing instrument and the cost of switching to liquid money is P 7.00. Determine the Optimal Money Balance. Assume that there are fifteen (15) switches. Create a table and indicate the Optimal Balance by encircling the appropriate Average Money Holdings.
Name a reason why retail Money Market Mutual Funds are not included in M1 but demand deposits and other checkable deposits are. What specific role of money does this analysis (e.g. medium of exchange, standard of value, standard of deferred payments, store of value) pertain to?
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