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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?
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.
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 for 2006 using 2005 as the base year. By what percent did prices increase.
Illustrate ahat are the general equilibrium values of the real interest rate, price level, consumption, and investment.
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.
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 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 ..
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 5 percent, Illustrate what will happen to the demand for the other product, holding constant the effects of all other factors?
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.
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..
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 ..
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