1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
iragen [17]
2 years ago
5

Bank Three currently has $600 million in transaction deposits on its balance sheet. The Federal Reserve has currently set the re

serve requirement at 6 percent of transaction deposits.
a. If the Federal Reserve decreases the reserve requirement to 4 percent, show the balance sheet of Bank Three and the Federal Reserve System just before and after the full effect of the reserve requirement change. Assume Bank Three withdraws all excess reserves and gives out loans, and that borrowers eventually return all of these funds to Bank Three in the form of transaction deposits.
Panel A: Initial Balance Sheets
Panel B: Balance Sheet after All Changes
b. Redo part (a) using a 8 percent reserve requirement.
Panel A: Initial Balance Sheets
Panel B: Balance Sheet after All Changes
Business
1 answer:
snow_lady [41]2 years ago
7 0

Answer:

Find solutions for your homework

businesseconomicseconomics questions and answersbank three currently has $600 million in transaction deposits on its balance sheet. the federal reserve has currently set the reserve requirement at 6 percent of transaction deposits. a. if the federal reserve decreases the reserve requirement to 4 percent, show the balance sheet of bank three and the federal reserve system just before and after the fullQuestion: Bank Three Currently Has $600 Million In Transaction Deposits On Its Balance Sheet. The Federal Reserve Has Currently Set The Reserve Requirement At 6 Percent Of Transaction Deposits. A. If The Federal Reserve Decreases The Reserve Requirement To 4 Percent, Show The Balance Sheet Of Bank Three And The Federal Reserve System Just Before And After The Full

This problem has been solved!See the answer

Bank Three currently has $600 million in transaction deposits on its balance sheet. The Federal Reserve has currently set the reserve requirement at 6 percent of transaction deposits.

a. If the Federal Reserve decreases the reserve requirement to 4 percent, show the balance sheet of Bank Three and the Federal Reserve System just before and after the full effect of the reserve requirement change. Assume Bank Three withdraws all excess reserves and gives out loans, and that borrowers eventually return all of these funds to Bank Three in the form of transaction deposits.

Panel A: Initial Balance Sheets

Panel B: Balance Sheet after All Changes

b.

Redo part (a) using a 8 percent reserve requirement.

Panel A: Initial Balance Sheets

Panel B: Balance Sheet after All Changes

Expert Answer 

89%

You might be interested in
In one state, a lender holds a lien on real property offered as collateral for a loan. The borrower retains both legal and equit
avanturin [10]

Answer:

LIEN THEORY

Explanation:

Based on the scenario being described it can be said that this state is a lien theory state, in which the court is enlisted to order and oversee the foreclosure procedure. In such a state, the buyer/borrower holds the deed to the real estate property until the mortgage expires and promises to make the mortgage payments that were previously agreed upon in the financial agreement.

7 0
3 years ago
The economy is growing far too quickly, as high aggregate demand is causing inflation. a. What fiscal policy should be pursued i
nika2105 [10]

Answer:

(a) Contractionary fiscal policy

(b) Aggregate shifts leftwards

Explanation:

Fiscal policy is a tool that is used by the government of a nation to control the fluctuations in the aggregate demand.

In this type of situation, government prefer to implement contractionary fiscal policy in the following form:

(1) Decreases government spending

(2) Increases taxes

When government increases taxes then as a result there is a fall in the consumer's disposable income. Therefore, the demand for the goods and services decreases in this economy and shifts the aggregate demand curve leftwards.

6 0
3 years ago
Which of the following is true? AChecks and Debit Cards both withdraw money directly from a bank account. BDebit cards offer the
jek_recluse [69]
I think its A. 
 
Because: 

B isn't true because if someone gets a hold of your debit card, you're somewhat screwed as they can withdraw your earned money

C Debit cards use earned actual money unlike a credit card

D Most businesses now days don't accept checks, because of so many bounced checks 
7 0
3 years ago
Read 2 more answers
Turnbull Corp. is in the process of constructing a new plant at a cost of $30 million. It expects the project to generate cash f
Nataliya [291]

Answer:

The net present value of this project is $1<u>3,587,962.96</u>

Explanation:

<em>The </em><em>Net present value (NPV)</em><em> is the difference between the present value of cash inflows and the present value of cash outflows  from a decision. A positive NPV indicates a profitable investment and a negative the opposite.</em>

<em>We can be work out the NPV of Turnbull Corp as follows</em>

                                                            Present Value

Year 1       13000,000× *(1.2^(-1)  = 10,833,333.3

Year 2     23,000,000 × 1.2^(-2) =   15,972,222.22

Year 3    29,000,000 ×  1.2^( -3) =   <u>16,782,407.41 </u>

Total PV of cash inflows                   43,587,963.0

Less the PV of cash outflow            <u>  (30,000,000)</u>

Net Present Value (NPV)                 <u>13,587,962.96</u>

       

The net present value of this project is $1<u>3,587,962.96</u>

8 0
3 years ago
Read 2 more answers
The company expects an annual need for 5,000 switches. If the company makes the product, it will have to utilize factory space c
WITCHER [35]

Based on the cost to produce each unit of the switches and the annual demand, the total costs will be $25,900 more than the cost of purchasing the switches.

<h3>What is the cost of producing the switches?</h3>

This can be found as:

= Variable cost + set up costs + supervisor's salary + opportunity cost of lost rent

= ( (6 + 5 + 4) x 5,000 units) + 45,500 + 41,000 + (3,700 x 12 months)

= $205,900

If they bought the switches at $36, they would cost:

= 36 x 5,000

= $180,000

Its cheaper to buy by:

= 205,900 - 180,000

= $25,900

Find out more on total costs computation at brainly.com/question/5168855.

#SPJ1

7 0
1 year ago
Other questions:
  • Stephanie's building, which was used in her business, was destroyed in a fire. Stephanie's adjusted basis in the building was $1
    7·1 answer
  • Boards Inc. fabricates skateboards that the company sells for $ 37.50 each. Fixed costs for the last 12 months equaled $4,800. F
    14·1 answer
  • Sam is paying off his eight-year, $15,360 loan in semiannual installments. The loan has an interest rate of 9.58%, compounded se
    15·2 answers
  • In a comparative market analysis, the subject property has 2 bedrooms, 2 baths, a 1/2 acre lot and a swimming pool. A $115,000 c
    7·1 answer
  • In an effort to get him to clean his bedroom, zack's mother gave him a gold star every time he cleaned it. each time he earned f
    13·1 answer
  • Principles are a. the obligations businesses have to maximize their positive impact and minimize their negative impact. b. mores
    13·1 answer
  • City Equipment announced this morning that its next annual dividend will be decreased to $1.90 a share and that all future divid
    7·1 answer
  • The statement of cash flows shows a firm's revenues, costs of goods sold, expenses, and net income. True or false
    9·2 answers
  • The break-even point is the sales level at which a company?
    12·1 answer
  • Henry fayol identified five functions of management: planning, organizing, commanding, coordinating, and controlling. these are
    14·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!