Banking system and money supply increase

Assignment Help Business Economics

Reference no: EM13834151

You take $1000 you had kept under your mattress and deposit it in your bank account. If this $1000 stays in the banking system as reserves and if banks hold reserves equal to 20 percent of deposits, by how much does the total amount of deposits in the banking system and money supply increase? If the required ratio is 10% now, does the money supply increase more or less? Explain your answers.

Reference no: EM13834151

Questions Cloud

Define virtualized operating systems and their hypervisors : Describe how you would implement controls to secure guest-to-host interaction between the virtualized operating systems and their hypervisors.

Real exchange rate : What is happening to the US real exchange rate in each of the following situations? Explain.

What was the exchange rate between swedish kronas and pounds : Suppose the exchange rate between the U.S. dollar and the Swedish krona was 6.65 krona = $1.00, and the exchange rate between the dollar and the British pound was £1 = $1.67. What was the exchange rate between Swedish kronas and pounds?

Both short-run and long-run aggregate supply : The following events have their initial impact on which of the following: aggregate demand, short-run aggregate supply, long-run aggregate supply, or both short-run and long-run aggregate supply? Do the curves shift to the right or left?

Banking system and money supply increase : You take $1000 you had kept under your mattress and deposit it in your bank account. If this $1000 stays in the banking system as reserves and if banks hold reserves equal to 20 percent of deposits, by how much does the total amount of deposits in th..

Write a blog post about the given articles : In this assessment item, you are required to maintain an online reflective blog/journal and write blog posts/entries based on academic articles.

Dollars exchange value on the firms profitability : What means do they use to hedge against exchange rate risk - Using this information, what do you think would be the effect of increases or decreases in the dollar's exchange value on the firm's profitability?

Receive an inheritance-return that you can depend on forever : If you receive an inheritance of $10,000 today, how long do you have to invest it at 8% per year to be able to withdraw $2,000 every year forever? Assume the 8% per year is a return that you can depend on forever.

Create a loop to print a table with all the characters : Create a loop to print a table with all the characters in the user's full name and their corresponding ASCII value. You may use the charAt() method of the String class to identify each of the characters in the full name and type cast them as int t..

User Account

All Pages