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s table shows the balance sh erve ratio is 15 percent.

s table shows the balance sh erve ratio is 15 percent.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Question. This table shows the balance sheet of the First National Bank. Assume the desired reserve ratio is 15 percent. Liabilities and net worth Assets Cash Reserves Securities Loans Property If a cheque for $14,000 is drawn and cleared against this bank, its reserves and demand deposits will be, respectively: $50,000 75,000 25,000 100,000 Demand Deposits $120,000 Stock shares 130,000 $50,000 and $106,000. $50,000 and $120,000. $36,000 and $106,000. $36,000 and $120,000. Question 3 Assume there are no investment projects in the economy that yield an expected rate of return of 25 percent or more. But suppose there are $10 billion of investment projects yielding expected returns of at least 20 percent; another $10 billion yielding at least 15 percent; another $10 billion yielding at least 10 percent; and so forth. What will be the equilibrium level of aggregate investment if the real interest rate is 20%? Your Answer: Answer
Transcribed Image Text:Question. This table shows the balance sheet of the First National Bank. Assume the desired reserve ratio is 15 percent. Liabilities and net worth Assets Cash Reserves Securities Loans Property If a cheque for $14,000 is drawn and cleared against this bank, its reserves and demand deposits will be, respectively: $50,000 75,000 25,000 100,000 Demand Deposits $120,000 Stock shares 130,000 $50,000 and $106,000. $50,000 and $120,000. $36,000 and $106,000. $36,000 and $120,000. Question 3 Assume there are no investment projects in the economy that yield an expected rate of return of 25 percent or more. But suppose there are $10 billion of investment projects yielding expected returns of at least 20 percent; another $10 billion yielding at least 15 percent; another $10 billion yielding at least 10 percent; and so forth. What will be the equilibrium level of aggregate investment if the real interest rate is 20%? Your Answer: Answer
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