Shen is heading out to lunch. He goes to the bank and withdraws $30 from his savings account. He heads to a local deli that sells half sub sandwichesfor $4.99 and whole subs for $7.99. Shen decides that he's pretty hungry and goes for the whole. He pays with a $10 bill and tells the cashier to keepthe change.Identify what role money plays in each of the following parts of the story.Hint: Select each role only once.Role of MoneyShen can easily determine that the whole sandwich, while twice as long as the half, ispriced at less than twice as much.Shen accumulates money in his savings account for future purchases.Shen buys his lunch with a $10 bill.Medium ofExchangeOUnit ofAccountStore ofValueOOo 5. Working through a change in the reserve requirementAssume that the following table portrays the balance sheet of First Western bank.AssetsVault CashDeposits at FedLoansTotal$150,000$250,000$500,000$900,000Liabilities and Net WorthFirst Western's bank reserves are equal to $checking deposits, First Western' would maintainreserves over and above the desired amount.DepositsThe increase in the money supply will beTotalsmaller$900,000$900,000If First Western uses the reserves above the desired level to extend additional loans, the money supply would increase by$If First Western bank wanted to maintain 0.20 of its assets as reserves againstas reserves. Therefore, it would have $as additionalIf First Western wanted to maintain 0.10 larger s as reserves against checking deposits, First Western' would maintainreserves, additional reserves would be $and the increase in the money supply would be $if First Western chooses a desired reserve ratio of 0.10.as

"Since you has asked two independent questions, the first question was answered for you. If you want…

Shen is heading out to lunch. He goes to the bank and withdraws $30 from his savings account. He heads to a local deli that sells half sub sandwiches for $4.99 and whole subs for $7.99. Shen decides that he's pretty hungry and goes for the whole. He pays with a $10 bill and tells the cashier to keep the change.

Shen is heading out to lunch. He goes to the bank and withdraws $30 from his savings account. He heads to a local deli that sells half sub sandwiches for $4.99 and whole subs for $7.99. Shen decides that he's pretty hungry and goes for the whole. He pays with a $10 bill and tells the cashier to keep the change.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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