Consider the following situations.a. Bank reserves are $100, the public holds $200 in currency, and the desired reserve-deposit ratio is 0.25. Find deposits and themoney supply.Instructions: Enter your responses as whole numbers.Deposits: $Money supply:b. The money supply is $500 and currency held by the public equals bank reserves. The desired reserve-deposit ratio is 0.25. Findcurrency held by the public and bank reserves.Instructions: Enter your responses as whole numbers.Currency held by the public: $Bank reserves:c. The money supply is $1,250, of which $250 is currency held by the public. Bank reserves are $100. Find the desired reserve-depositratio.Instructions: Enter your response rounded to one decimal place.Desired reserve-deposit ratio:

A) Deposits computed as, => (Reserve / reserve deposit ratio) Therefore, Deposits $100/0.25 =…

Lonsider the following situations. a. Bank reserves are $100, the public holds $200 in currency, and the desired reserve-deposit ratio is 0.25. Find deposits and th money supply. Instructions: Enter your responses as whole numbers. Deposits: Money supply: $ b. The money supply is $500 and currency held by the public equals bank reserves. The desired reserve-deposit ratio is 0.25. Fine currency held by the public and bank reserves. Instructions: Enter your responses as whole numbers. Currency held by the public: $1 Bank reserves: C. The money supply is $1,250, of which $250 is currency held by the public. Bank reserves are $100. Find the desired reserve-depo ratio. Instructions: Enter your response rounded to one decimal place. Desired reserve-deposit ratio:

Lonsider the following situations. a. Bank reserves are $100, the public holds $200 in currency, and the desired reserve-deposit ratio is 0.25. Find deposits and th money supply. Instructions: Enter your responses as whole numbers. Deposits: Money supply: $ b. The money supply is $500 and currency held by the public equals bank reserves. The desired reserve-deposit ratio is 0.25. Fine currency held by the public and bank reserves. Instructions: Enter your responses as whole numbers. Currency held by the public: $1 Bank reserves: C. The money supply is $1,250, of which $250 is currency held by the public. Bank reserves are $100. Find the desired reserve-depo ratio. Instructions: Enter your response rounded to one decimal place. Desired reserve-deposit ratio:

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Banks in New Transylvania have a desired reserve ratio of 10 percent of deposits and noexcess reserves. The currency drain ratio is 50 percent of deposits. Now suppose that thecentral bank increases the monetary base by $900 billion.i. How much do the banks lend in the first round of the money creation process?ii. How much of the initial amount loaned flows back to the banking system as newdeposits?iii. How much of the initial amount loaned does not return to the banks but is heldas currency?iv. Why does a second round of lending occur?
What is the ratio of reserves to deposits that a bank finds prudent to hold? Describe the situation in which a bank has $10 million in actual reserves and $8 million in desired reserves. The ratio of reserves to deposits that a bank finds prudent to hold is its _______. When a bank has $10 million in actual reserves and $8 million in desired reserves, it has _______. A. desired deposit ratio; a shortage of deposits B. desired reserve ratio; surplus reserves C. desired reserve ratio; insufficient reserves D. planned reserve ratio; a currency drain
I’m confused on all three please help!
If banks increase their holdings of excess reserves O a. the money multiplier increases and the money supply decreases. O b. the money multiplier decreases and the money supply increases. c. the money multiplier and the money supply decrease. O d. the money multiplier and the money supply increase.
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Banks in New Transylvania have a desired reserve ratio of 10 percent of deposits and noexcess reserves. The currency drain ratio is 50 percent of deposits. Now suppose that thecentral bank increases the monetary base by $900 billion.i. How much do the banks lend in the first round of the money creation process?ii. How much of the initial amount loaned flows back to the banking system as newdeposits?iii. How much of the initial amount loaned does not return to the banks but is heldas currency?iv. Why does a second round of lending occur?v. Calculate money multiplier in this example?vi. What is the final increase in the quantity of money?
B. In the economy of Nocoin, Bank deposits are $300 billion, bank reserves are $15 billion of which two-thirds are deposits with the central bank. Households and firms hold $30 billion in bank notes. There are no coins. Calculate: i. The monetary base and quantity of money. ii. The banks' desired reserve ratio and the currency drain ratio (as percentage).
n the table below, the money supply, defined by M3, is equal to ........ Currency held by the non-bank public ($ billion) Current deposits at banks ($, billion) Other deposits at banks and other deposits held by other deposit -taking institutions ($, billion) 60 240 1500 Select one: a. 1200 billion b. 1800 billion c. 1500 billion d. 1740 billion
2A. What is the net worth of the people’s bank? 2b.What is the required ratio? 2c.What are the people’s bank excess reserves? 2d. That arts the total loans of the people’s bank? 2e. Based on your answer in 2b computer money multiplier. 2f. Suppose a depositor comes to the bank and withdraw $2000 in cash. How much money supply will be reduced in the economy?
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Please no written by hand and no emage
In an economy, the banks prefer to keep 25% of their deposits in reserve. The population likes to keep their currency holdings equal to 10% of the deposits. Initially, there was zero money in the economy. Then the central bank buys $120 worth of T-bills from a household. The household receives $120 on its checking account. 1. the commercial bank formed reserves and gave out a loan. The population allocated the lent funds between the currency in pockets and checkable accounts. Before anything else happens, how much money is there in the economy at the end of Round 1? ANSWER: 288 For question 1 How is this answer obtained?, How would you solve question 2. 2. In Round 2, more lending, borrowing, and reserve formation takes place. How much is in DEPOSITS in the economy at the end of Round 2?