What is the maximum increase in checking account deposits

Assignment Help Macroeconomics
Reference no: EM13234293

a. Use a T-account to show the initial effect of this transaction on Bank of America's balance sheet.

b. Suppose that Bank of America makes the maximum loan they can from the funds you deposited. Use a T-account to show the initial effect on Bank of America's balance sheet from granting the loan. Also include in this T-account the transaction from question (a.).

c. Now suppose that whoever took out the loan in question (b) writes a check for this amount and that the person receiving the check deposits it in Bank of Boston. Show the effect of these transactions on the balance sheet of Bank of America and Bank of Boston, after the check has been cleared. On the T-account for Bank of America, include the transactions from questions (a) and (b).

d. What is the maximum increase in checking account deposits that can result from your $4,000 deposit? What is the maximum increase in the money supply?

Reference no: EM13234293

Questions Cloud

Discuss the advantages of using work sampling : Discuss the advantages of using work sampling to understand how employees allocate their time among work activities.
Draw the product structure tree : Draw the product structure tree if 30 units ofA are required in Week 8, determine the necessary planned order releases for all components
Compute the partial pressure of ozone : The concentrations of ozone in Los Angeles has been measured at 441 ppb. Los Angeles sits at an altitude of 7400 ft where the atmospheric pressure is only 0.67 atm. Calculate the partial pressure (in atm) of ozone at 441 ppb if the atmospheric pre..
Use linear programming that will help farmer gonzalez : Government regulations require that at least 30 bushels of corn be produced during the current year.
What is the maximum increase in checking account deposits : Suppose that Bank of America makes the maximum loan they can from the funds you deposited. Use a T-account to show the initial effect on Bank of America's balance sheet from granting the loan. Also include in this T-account the transaction
Determine the recoil velocity : For tests using a ballistocardiograph, a patient lies on a horizontal platform that is supported on jets of air, that the patient and platform start from rest, determine the recoil velocity
How many rows will truth table require if there six variable : How many rows will a Truth Table require if there are six variables and three conditions of each variable? Defend your answer.
Compute the required quantity of each reagent : Calculate the required quantity of each reagent and the volume of water that must be added for dilution. a. Chlorine water
Which person has comparative advantage in chickens : Suppose two people, Michelle and James each live alone in an isolated region. Both have the same resources available, and the grow potatoes, and raise chickens. If Michelle devotes all her resources to growing potatoes, she can raise 200 pounds of..

Reviews

Write a Review

Macroeconomics Questions & Answers

  Short run and long run aggregate demand

Create another diagram; once again start from an initial macroeconomic equilibrium. Explain both the SR and LR impact of a contractionary AS shock on Y. Use the appropriate diagrams and provide a brief real world example of this type of shock.

  Degree of monopoly power using lerner index

A monopolist faces demand curve p = 11-Q , where Q is measured in thousands of units. Compute the firm's degree of monopoly power using the Lerner index?

  Compute the value of the price index for gdp

Compute the value of the price index for GDP for 2006 using 2005 as the base year. By what percent did prices increase.

  Illustrate ahat are the general equilibrium values

Illustrate ahat are the general equilibrium values of the real interest rate, price level, consumption, and investment.

  Determine the discount rate employ for pricing bond a

The bonds are identical in every way (e.g. they have the same coupon payment, maturity data, etc.), except that A is "riskier" than B - i.e. you think the probability of full payment of principal and interest is lower for A than it is for B.

  School of economic thought reject fiscal policy

The Fed should simply raise the money supply at same rate that full employment economy increase, and the government should desist from any stabilizing urges.

  Which of the happing tends to occur during recessions

Which of the followings tends to occur during recessions Cyclical unemployment tends to fall The stock markets tends to surge (experience a rapid rise in prices) Interest rates tend to fall Gross Domestic Product rises Consumer ..

  What level of excess reserves does the bank have

Third National Bank has reserves of $20,000 and checkable deposits of $100,000. The reserve ratio is 20 percent. Households deposit $15,000 in currency into the bank and that currency is added to reserves.

  If the costs of one of the goods rise by some percent

If the costs of one of the goods rise by 5 percent, Illustrate what will happen to the demand for the other product, holding constant the effects of all other factors?

  How to calculate the present worth values

If the average person drinks two bottles of water per day or uses 5 gallons per day in getting that amount of water from the tap. what are the present worth values of drinking botled water or tap water per person for 1 year.

  Describe how tim''s consumption possiblities change

Tim buys 2 pizzas and sees 1 movie a week when he has $16 to spend. The price of a movie ticket $8, and the price of a pizza is $4. Draw Tim's budget line. If the price of a movie ticket falls to $4, describe how Tim's consumption possiblities cha..

  Derive the supply schedule from the supply function

A. derive the supply schedule from the following supply function: QS=10P B. Derive the supply schedule from the following supply function; QS' = 20 + 10P C. On the same graph, plot the supply schedule of part A and label it S and the supply curve of ..

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