How much in new loans can hometown bank make as a result

Assignment Help Microeconomics
Reference no: EM131026520

Assume that the reserve requirement is 12.5 percent and that $500,000 is added to Hometown Bank's excess reserves as a result of a change in Federal Reserve policy.

a. How much in new loans can Hometown Bank make as a result of this increase in excess reserves?

b. If the entire amount of Hometown Bank's new loans is spent and the funds are deposited in Bank B, by how much can Bank B increase its loan making?

c. What is the maximum amount by which loan making can be increased in the financial depository institutions system as a result of the increase in Hometown Bank's excess reserves?

d. What is the maximum amount in new loans that could be made in the financial depository institutions system following the initial increase in Hometown Bank's excess reserves if the reserve requirement were 20 percent?

Reference no: EM131026520

Questions Cloud

State tworeasons why would jason want to start own business : Jason follows a democratic leadership style. Do you think that Jason's leadership style will motivate his employees? Justify your answer.
Attributable to improvements in quality : A quality improvement program was implemented at the beginning of 2014. Overall control (prevention and appraisal) quality was targeted for improvement. The quality costs for 2012 and 2015 follow. Assume any changes in costs are attributable to im..
Test coupled with real users views of the product : Explain the importance of having a test coupled with real users' views of the product at the end of the development effort, even if it is the test of a prototype and not the fully developed software.
What must he expect to happen to short term interest rates : Assume that an investor is risk-neutral (i.e. assume that the investor always chooses the investment with the higher expected rate of return even if it is riskier). If the yield on 1-year marketable CD's is 6% while the yield on 2-year marketable ..
How much in new loans can hometown bank make as a result : Assume that the reserve requirement is 12.5 percent and that $500,000 is added to Hometown Bank's excess reserves as a result of a change in Federal Reserve policy. How much in new loans can Hometown Bank make as a result of this increase in excess..
Presenters can present drafts of the ppt : Presenters can present drafts of their PPT and presentation plan ideas for review/feedback prior to presenting the final version of responses.
Underlying proportion of women : Assume that pM is the true underlying proportion of men who favor the issue and that pW is the true underlying proportion of women who favor of the issue. If it actually is true that pW = pM = p, find the MLE of the common proportion p.
Depending on the value : The coin is tossed twice and a value for Y , the number of heads, is observed. For each possible value of Y , which of the two values for p (1/4 or 3/4) maximizes the probability that Y = y? Depending on the value of y actually observed, what is t..
What are the most critical problems you face as a manager : What are the most critical problems you face as a manager? What are the most critical skills needed to be a successful manager in your line of work? What are the major reasons managers fail in positions like yours?

Reviews

Write a Review

Microeconomics Questions & Answers

  Total cost of producing widgets

Table below gives total cost of producing widgets for variable output levels:

  Your company bright paints is one of a dozen companies

your company bright paints is one of a dozen companies manufacturing a special reflective paint used for traffic signs.

  What is acs fixed cost and what is the variable cost

what are the expressions for AC's total revenue ,marginal revenue, total cost and marginal cost as a function of output? what is AC's fixed cost and what is the variable cost?

  Discuss the context of legislation

Discuss the context of legislation - name the expected demanders and suppliers as outlined in our textbook and describe the expected interest groups and there specific arguments.

  What number of subscribers will minimize ac for the firm

Where Q is millions of subscribers What is the total cost function What is the marginal Cost function What number of subscribers will minimize AC for this firm What is the level of AC at this output

  Provide an estimate for underlying population distribution

Using the distribution described in part a), compute the probability that an individual adult, randomly selected from the U.S. population, will have a BMI greater than or equal to 30 (i.e., calculate Pr(BMI ≥ 30). Construct a 90% Confidence Interv..

  Presume a treasury bill has a purchase price

Presume a Treasury bill has a purchase price of $9850; a face value of $10,000 and 99 days to maturity. Compute the yield to maturity. Answer as a percent and round to two decimal places

  First-degree price discrimination

First-degree price discrimination- occurs when a firm charges each consumer the maximum price he or she would be willing to pay for each unit of the good purchased. results in the firm extracting all surpluses from consumers.

  What impact will the unanticipated increase in money supply

what impact will an unanticipated increase in the money supply have on the real interest rate real output and

  For what values of ? and y will signaling occur

For what values of λ and y will signaling occur (a separating equilibrium)? For what values of λ and y will signaling not occur (a pooling equilibrium)? Briefly explain.

  Describe how one of these solutions operates and

Describe, using diagrams where appropriate, the market for rental accommodation before and after the introduction of rent controls. Illustrate the surpluses accumulating to producers and consumers before and after the introduction of the price ceilin..

  Whether production function exhibits increasing or constant

Sweetgrass Radiology Labs has a fixed amount of radiology equipment. The laboratory can hire any number of radiology technicians per hour to produce radiographs, which are displayed on a screen.

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