With a reserve requirement of 10% and an initial increase of $500 to the monetary base, what is the total amount of money that could be added to the money supply? (Hint: use the money multiplier formula) $10,000 O $11,000 $550 $5,000 $1,100 .
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- Handwritten calculation otherwise will dislike19)Consider the following scenario. The currency deposit ratio is 0.5, the required reserve ratio is 0.25. The bank holds the required reserves, plus a little extra in case of a large withdrawal equal to e(R)=0.5-2R. Where R is the interest rate and it is equal to 12.5. The money supply is £600. Using the money multiplier approach calculate how many pounds worth of bonds would the Bank of England have to buy/sell in order to increase the money supply to £900? a. Sell bonds for an amount equal to $200. b. Buy bonds for an amount equal to $200. c. Buy bonds for an amount equal to $400. d. Sell bonds for an amount equal to $250.Chapter 16: Reserves = $1,500 First national bank Loaned = $8,500 Chapter 17: Deposits = $10,000 Money Created = Amount x MM 1. If the bank has to maintain a required reeserve ratio of 10% then what is the excess reserve if any? 1/P 2. If the reserve ratio is 10% then what will be money multiplier 3. How much extra money the bank will be able to create with an addtional MS 3/4 # 1/2 0 Total Reserve = Required Reserve + Excess Reserve Money Multiplier = 1/R Where R is Reserve Ratio MD 1. What is the price level at the equilibirum? 2. What is the value of money at the equilibirum? 3. If the velocity is 4, money supply is 100, price level is 10 then what will be the output? MXV=PXY P= Price level Value of Money = 1/P
- 0 Question 22 (use the Deposit Expansion Multiplier (DEM) formula) Using the Fractional Reserve banking system, if the reserve ratio is 6% and someone deposits $1,000 into his checking account, the banking system potentially can increase the money supply to O $16,750.25 O $16,666.66 $16,100 $16.230.66"If the required reserve ratio is 20% and the current deposit is $50,000. Calculate the amount of new money created." O"$200,000" O "$250,000" O"$10,000" "$40,000"Money market mutal fund balances held by businesses $100 money market mutual funds balances held by individuals $220 currency in Bank $10 currency in circulation $70 savings deposits, including money market deposit amounts $50 large-denominated (100,000 or more) time deposits 180 small denominates (100,000 or less) time deposits 80 checkable deposits 90 Refer to the table. Money supply M1 for this economy is A.) 160 b) 70 c. 90 D. 170
- 6. The money multiplier is equal to the reciprocal of the reserve requirement ratio. However, scholars have pointed out that such formula only provide the upper limit (maximum value) of the money multiplier seeing that the money multiplier is typically less than what the formula estimates. Why is this the case? Explain in detail.ou just deposited $4,000 in cash into a checking account at the local bank. Assume that banks lend out all excess reserves and there are no leaks in the banking system. That is, all money lent by banks gets deposited in the banking system. Round your answers to the nearest dollar. If the reserve requirement is 1212%, how much will your deposit increase the total value of checkable bank deposits? $ If the reserve requirement is 44%, how much will your deposit increase the total value of checkable deposits? $ Increasing the reserve requirement the money supply.Do not use Ai and chatgpt