Banking system using the simple deposit multiplier

Assignment Help Macroeconomics
Reference no: EM131049300

Suppose the reserve requirement is 4%. If the Fed buys $1 million in bonds from the First National Bank, what is the total deposit creation in the banking system using the simple deposit multiplier? Using the information above, except current ratio is 33%, with excess reserve is 1%, what is the change in money supply?

Reference no: EM131049300

Questions Cloud

Atm and other financial innovations : How should the Fed Reserve Bank have responded to ATM's and other financial innovations of the 1970's when projecting money growth? Think in terms of velocity.
Write term paper about information technology strategic plan : Write a term paper about Information Technology Strategic Plan. Imagine that a company has recently hired you as a senior business consultant. The company is seeking to gain better traction with regard to customer satisfaction and loyalty.
Bodily injury arising out of sexual molestation : FACTS Alberto and Karelli Mila were insured under a homeowners' liability policy. The policy, in "exclusion k," stated that coverage did not apply to "bodily injury arising out of sexual molestation, corporal punishment or physical or mental abuse..
Marginal revenue product of the second worker : If the marginal product of the second worker hired by a firm is 14 units and the price of a unit of output is $7 regardless of the quantity of output sold, then the marginal revenue product of the second worker is?
Banking system using the simple deposit multiplier : Suppose the reserve requirement is 4%. If the Fed buys $1 million in bonds from the First National Bank, what is the total deposit creation in the banking system using the simple deposit multiplier?
What is the variance of returns over this period : You’ve observed the following returns on Hacker Corporation’s stock over the past five years: -25%, 36%, 9%, 11%, and 17%. Answer the following questions. What is the arithmetic average return on the stock over this five-year period? a. 8.8% b. 9.6% ..
What is the growth rate of money : The real growth in the output of the economy is +1.5%, inflation is 2.0%, what is the growth rate of money (the velocity of money is constant? What would happen if velocity was increasing by 1% What would make it increase?
How much can you withdraw each month from your account : You are planning to save for retirement over the next 25 years. To do this, you will invest $700 a month in a stock account and $300 a month in a bond account. The return of the stock account is expected to be 9.0 percent, and the bond account will p..
A list of assets provided by the advertising : Video Question To watch this chapter's video, Accountant's Liability, go to www.cengagebrain.com. Register the access code that came with your new book or log in to your existing account. Select the link for the "Business Law Digital Video Library..

Reviews

Write a Review

Macroeconomics Questions & Answers

  An analyst at an investment bank

You work as an analyst at an investment bank. The CEO of the firm just came back from the Annual Policy Symposium at Jackson Hole. He tells you that he listened to the presentation by Professor Robert Hall, who chairs the National Bureau of Econom..

  What happens to the multiplier if the aggregate supply curve

Use an aggregate supply-and-demand diagram to show that multiplier effects are smaller when the aggregate supply curve is steeper. Which case gives rise to more inflation—the steep aggregate supply curve or the flat one?

  Define the union wage gain and the union wage gap why

define the union wage gain and the union wage gap. why should we care about the magnitude of the union wage gain? why

  Explain the nominal interest rate

A chartered bank offers a one-year loan at "3 points above prime." Prime is 4 per cent. then what is the nominal interest rate.

  Describe when and why central banks buy either their own

describe when and why central banks buy either their own currency or the currency of another nation in an effort to

  Discuss price discrimination

Select 2 companies in the geographical location you live in and find out if they price discriminate. Why do these two companies price discriminate?

  What are some of major provisions of the wall street reform

What did the Federal Reserve do during the financial crisis of 2008 and 2009 How did the recent financial crisis affect the financial services industry What are some of the major provisions of the Wall Street Reform and Consumer Protection Act

  Determine the steps that the federal reserve

Explain how each of the following variables will be affected by proposed steps that you have identified in the first part of the discussion: money supply, interest rates, inflation rate, aggregate demand, and output. Provide support for your response

  What quantities of will you purchase to maximize utility

The utility-maximization model assumes that the typical consumer is rational and acts on the basis of well-defined preferences. Because income is limited and goods have prices, the consumer cannot purchase all the goods and services he or she migh..

  Why is the theory of inflation

Why is the theory of inflation that we have learnt in the class called classical theory - transaction whose value does not qualify as a part of nominal GDP

  The level of economic activity in australia

Explain the expected impact of the 2014-15 budget outcome on the level of economic activity in Australia

  What is the rate of return on investment

Shelly s assets include money in the checking and savings accounts, investments in stocks and mutual funds, personal property, such as furniture, appliances, an automobile, coin collection and jewelry. Shelly calculates that her total assets are $108..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd