Deposits in excess reserves

Assignment Help Microeconomics
Reference no: EM13697351

Suppose the Fed purchases $250 million worth of securities from banks. If the currency/deposit ratio is 0.6 and The Fed requires banks to hold 12% of their deposits in reserves, how much money will be created through The Fed’s action if banks hold 2% of their deposits in excess reserves?

Reference no: EM13697351

Questions Cloud

Example of the prisoners dilemma : Which of the following is an example of the prisoner's dilemma?
What is the value of the marginal propensity to consume : Consider a simple economy in which investment is constant and equal to $100 billion. There is no government or foreign sector, and the price level is constant. What is the value of the marginal propensity to consume?
Impact the money supply : Explain how the following would impact the money supply: a. People decide to hold more cash b. Banks hold more excess reserves c. The Fed decreases the required reserve rate d. The Fed increases the discount rate
The fed decreases the money supply : Use the supply and demand for Reserves to show what happens to the Federal Funds Rate when The Fed decreases the money supply. Assume that ior
Deposits in excess reserves : Suppose the Fed purchases $250 million worth of securities from banks. If the currency/deposit ratio is 0.6 and The Fed requires banks to hold 12% of their deposits in reserves, how much money will be created through The Fed’s action if banks hold 2%..
Appropriate federal funds rate according to the taylor rule : If the current inflation rate is 3.3%, potential gdp is $16.9 trillion, and actual GDP is $15.7 trillion, what is the appropriate federal funds rate according to the Taylor Rule?
Represents the weekly demand that a local theater faces : The following equation represents the weekly demand that a local theater faces. Qd = 2000 - 25 P + 2 A, where P represents price and A is the number of weekly advertisements. Presently the theater advertises 125 times per week.
What are the three traditional tools of monetary policy : What are the three traditional tools of Monetary Policy? Describe the mechanics of how each change the supply of money in the economy.
Market for lemons describes the traditional market : If the Market for Lemons describes the traditional market for used cars what happens to the quantity of cars bought/sold under the following conditions? a. The traditional market for lemons. b. Car dealers become sellers of used cars?

Reviews

Write a Review

Microeconomics Questions & Answers

  How the laffer curve can have an inverted u-shape

If leisure is a normal good, the Laffer Curve can have an inverted U-shape only if leisure and consumption are (at least at some point) sufficiently substitutable such that the substitution effect (on leisure) outweighs the wealth effect (on leisu..

  What fiscal policies and monetary policies be appropriate

What is the "current macroeconomic situation" in the U.S. (e.g. is the U.S. economy currently concerned about unemployment, inflation, recession, etc.)? What fiscal policies and monetary policies would be appropriate at this time

  What is the after-tax investment value of the machine

A corporation purchased a machine for $60,000 five years ago. It had an estimated life of 10 years and an estimated salvage value of $9,000. The current book value of this machine is $12,500. If the current market value is $30,000 and the effective i..

  Explain what happens to the price of oranges and the margin

Suppose a freeze in Florida destroys part of the Florida orange crop. a. Explain what happens to the price of oranges and the marginal product of orange pickers as a result of the freeze.

  Distinguish between economie of scale and economies of scope

Economies of Scope) Distinguish between economies of scale and economies of scope. Why do some firms produce multiple product lines, while others produce only one?

  What do you mean by properly functioning free market

The City Symphony presents three open-air concerts in the city park pavilion during the spring and summer. Many who attend make donations for symphony expenses, but the donation is not required. Some who attend make no contributions.

  What characterizes a winner-take-all labor market

What characterizes a winner-take-all labor market and Offer some reasons why corporate heads now earn much more than they did in the 1970s.

  Determine what effect a price increase would hence on total

RKT corporation is a publisher of Economics books. The demand function for its books is given by the equation Qx = 12000 - 5000 Px + 5y + 500 Pc where Px is the price charged for RKT's boks, y is income per capita and Pi is the price of books from co..

  Explain an experience that you have had working on a team

Explain an experience that you have had working on a team. As a part of your response discuss how the team was evaluated. Also discuss whether or not the free-rider problem existed on your team. If it did exist also discuss how/if the problem was add..

  Find the quantity demanded if price is 10 income is 9000

a multiplicative demand function of the form qd apb1yb2pob3 is estimated using cross-sectional data and 224

  1 answer part a-d for the following formulasnbspi ye1x ii

1 answer part a-d for the following formulas.nbspi ye1x ii lnysinxnbsp calculate in radians not degrees for d and fa

  Economical to install and operate the baler

The johnson company pays $2000 a month to a trucker to haul wastepaper and cardboard to the city dump. The material could be recycled if the company were to buy a $60,000 hydraulic press baler and spend $30,000 a year for labour to operate the baler.

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