Reference no: EM131193540
Use the Market for Reserves framework to analyze each of the following scenarios. Treat each scenario separately (i.e. draw a separate graph for each). Assume that the market is currently in equilibrium. Important: Make sure that your graphs clearly show changes in the equilibrium federal funds rate, changes in the equilibrium level of reserves, and any shifts in the demand or supply curves. Explain in one sentence what your graph is showing.
Commercial banks increase their demand for reserves.
The Fed decides to decrease the required reserves ratio.
Complete the questions below based on the following scenario: ABC Financial starts its first day of operations with $9 million in capital. A total of $130 million in checkable deposits is received. The bank makes a $25 million commercial loan and another $50 million in mortgages with the following terms: 200 standard, 30-year, fixed-rate mortgages with a nominal annual rate of 5.25%, each for $250,000. Assume that required reserves are 8%.
Illustrate the balance sheet for ABC Financial.
How well capitalized is this bank? Show your calculations to support your answer.
Calculate the risk-weighted assets and risk-weighted capital ratio after ABC’s first day.
Use the Taylor rule to calculate the target for the federal funds rate for October 2012, using the following information: equilibrium real federal funds rate of 2%, target inflation rate of 2%, current inflation rate of 1.2%, and an output gap of 5.9%. In your calculations, the inflation gap is negative if the current inflation rate is below the target inflation rate. How does the targeted federal funds rate calculated using the Taylor rule compare to the actual federal funds rate of 0% to 0.25% at the time? Briefly explain.
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Discuss the importance of understanding diversity
: Describe in your own words the nature of the problem and the mission of the company. What are the internal and external environments; for example, location, number of employees, products, distribution?
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A detriment to economic growth
: A detriment to economic growth: According to the principle of comparative advantage, trade between two countries will benefit:
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Explain what are some of causes of health care disparities
: What are some (at least two) of the causes of health care disparities? Take into consideration the moral and spiritual dimensions of health care reform.
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Characteristics of that particular market
: Identify a company in your local or generalized area that you would classify as a monopoly. Explain the key reasons why you classified the company as a monopoly, and state how the company operates relative to at least two (2) characteristics of that ..
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Show changes in the equilibrium federal funds rate
: Use the Market for Reserves framework to analyze each of the following scenarios. Treat each scenario separately (i.e. draw a separate graph for each). Assume that the market is currently in equilibrium. Important: Make sure that your graphs clearly ..
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Create a sequence and use it to enter data into at least 1
: Rebuild the new table structure that contains at least 4 tables (use Notepad). Use tables to show what the NEW schema looks like (either type the schema out in word or a text editor or show the print of the "desc tablename" of all tables.) Create a s..
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Highlight the key programming techniques
: At a minimum, post at least three notes that highlight the key programming techniques and/or problems or lessons learned that you experienced with this week's lab.
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Describe and access australian regulatory taxation system
: This assessment has been designed to ensure that you are engaging with the subject content on a regular basis and to assess your ability to: gather and integrate your knowledge on the Australian taxation system; describe and access the Australian r..
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Which countries have a negative interest rate
: Which countries have a negative interest rate? Do you think one day USA too may have negative interest rate? If so, will it affect your saving and expenditure patterns? How can this affect stock market?
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