Consider an economy in which banks do not hold excess reserves; non-bank entities hold all money in the form of checkable deposits; and the required reserve ratio is 15 percent. If the monetary authority (ex the Fed) writes a $200,000 check to a member of the non-bank public, checkable deposits in this economy would increase by $200, 000. O $2,000,000. O $13, 333,333. O $1,333,333.

Consider an economy in which banks do not hold excess reserves; non-bank entities hold all money in the form of checkable deposits; and the required reserve ratio is 15 percent. If the monetary authority (ex the Fed) writes a $200,000 check to a member of the non-bank public, checkable deposits in this economy would increase by $200, 000. O $2,000,000. O $13, 333,333. O $1,333,333.

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Ef 321.
The table shows the balance sheet of a banking system (aggregated over all banks) The desired reserve ratio on all deposits is 5 percent. There is no currency drain Assets Liabilities (millions of dollars) What is the quantity of loans and the quantity of total deposits when the banks have no excess reserves? Reserves at the Fed Cash in vault 25 Checkable deposits Savings deposits 100 20 100 >>> Answer to 2 decimal places Securities 65 Loans 90 The total quantity of loans after the banks have lent all their excess reserves is SOmilion. The total quantity of deposits after the banks have lent all their excess reserves is Smillion
Challenge Problem. Assume that the public in the small country of Sylvania does not hold any cash. Commercial banks, however, hold 10 percent of their checking deposits as excess reserves, regardless of the interest rate. In the questions that follow, the "money multiplier" is given by 1/ (RR+ ER), where RR = the percentage of deposits that banks are required to keep as reserves ER = the percentage of deposits that banks voluntarily hold as excess reserves Consider the balance sheet of one of several identical banks Assets Liabilities and Net Worth Reserves 600 Checking Deposits 2,400 Loans 1,800 Net Worth Total Assets 2,400 Liabilities and Net Worth 2,400
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Use the following table to answer the question about the money supply given the following hypothetical data for an economy. Item Billions of Dollars $2,000 350 80 Checkable Deposits Small Time Deposits Currency Held By The Public Savings Deposits, Including Money-Market Deposit Accounts Money-Market Mutual Funds Held By Individuals Money-Market Mutual Funds Held By Businesses 1,300 600 700 Refer to the table above. The size of the M1 money supply is: Select one: O a. $1,940 O b. S2,730 O c. None of the above O d. S2,220 O e. $2,080 Activate Windows Go to Settings to activate
45. Consider the following situation in the Canadian banking system: • The Bank of Canada purchases $5 million worth of government securities from an investment dealer with a cheque drawn on the Bank of Canada. • The dealer deposits this cheque at Bank XYZ, a commercial bank. • The target reserve ratio for all commercial banks is 20%. • All commercial banks operate with no excess reserves. • There is no cash drain. Suppose the public decides to hold 30% of their deposits in cash — that is, there is now a cash drain of 30%. As a result of the new deposit, the money supply would eventually decrease by $12.50 million. increase by $10 million. decrease by $15 million. increase by $12.50 million. not change.
A2-2. The Chinese central bank (PBOC) recently lowered its required reserve ratio for banks in China. If we assume that the initial balance sheet of the banking system is as shown below, and that everyone holds all their money in the banking system, and that the reserve ratio is decreased from 10% to 5%, both loans and the money supply will increase by 1000.
The money creation process Suppose Southeast Mutual Bank, Walls Fergo Bank, and PJMorton Bank all have zero excess reserves. The required reserve ratio is presently set at 20%. Brian, a Southeast Mutual Bank customer, deposits $1,500,000 into his checking account at the local branch. Complete the following table to reflect any changes in Southeast Mutual Bank's T-account (before the bank makes any new loans). Assets Liabilities 2 categories under Assets: 1. Building and furniture, Deposits, Loans, Net worth or Reserves 2. $300,000 or $1,200,000 or $1,500,000 or $3,600,000 2 Categories under Liabilities: 1. Building and furniture, Deposits, Loans, Net worth or Reserves 2. $300,000 or $1,200,000 or $1,500,000 or $3,600,000 Complete the following table to show the effect of a new deposit on excess and required reserves when the required reserve ratio is 20%. Hint: If the change is negative, be sure to enter the value as negative number. Amount Deposited Change in…
I need both a ) and b)answers i will give upvotes no chatgpt
Suppose the quotes for currencies in the three money centers are given as follows: At London center: 1GBP = 150 JPY At Tokyo center: 1USD = 115 JPY At New York center: 1USD = 0.86GBP An investor has 100,000 USD. Is there any opportunity for arbitrage? If yes, explain how does the investor use arbitrage to take advantage of these data? And how much could he or she earn from this?
A new bank has vault cash of $2 million and $6 million in deposits held at its Federal Reserve District Bank.If the required reserves ratio is 9 percent, what dollar amount of deposits can the bank have?
am. 112.

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