i need in wordsnot handwritten solution please QUESTION 5Table 4 shows the credit creation information after an open market purchase of securities fromBank A by the Reserve Bank of Australia (RBA). Assume that banks loan all funds and keepno excess reserves.Table 4. Credit creationRound12BankABDeposit+$50,000+$47,000Using the data from Table 4,(a)(b)(c)(d)ReserveX+$2,820Loan+$47,000yWork out the values of x and y in Table 4.Calculate the reserve ratio and the money multiplierGiven the money multiplier from part (b), what is the total amount of money that canbe created (including the initial RBA deposit) from the initial RBA deposit?If the RBA increases the reserve ratio, how does it affect the total amount of moneycreated? Explain.

Money deposit creation: Money deposit creation is a process in which the deposit increases by the…

Table 4 shows the credit creation information after an open market purchase of securities from Bank A by the Reserve Bank of Australia (RBA). Assume that banks loan all funds and keep no excess reserves. Table 4. Credit creation Round Bank 1 A 2 B Deposit +$50,000 +$47,000 Reserve +$2,820 Loan +$47,000 y Using the data from Table 4, (a) Work out the values of x and y in Table 4. Calculate the reserve ratio and the money multiplier (b) (c) Given the money multiplier from part (b), what is the total amount of money that can be created (including the initial RBA deposit) from the initial RBA deposit?

Table 4 shows the credit creation information after an open market purchase of securities from Bank A by the Reserve Bank of Australia (RBA). Assume that banks loan all funds and keep no excess reserves. Table 4. Credit creation Round Bank 1 A 2 B Deposit +$50,000 +$47,000 Reserve +$2,820 Loan +$47,000 y Using the data from Table 4, (a) Work out the values of x and y in Table 4. Calculate the reserve ratio and the money multiplier (b) (c) Given the money multiplier from part (b), what is the total amount of money that can be created (including the initial RBA deposit) from the initial RBA deposit?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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