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
kvasek [131]
2 years ago
9

Suppose the Federal Reserve sets the reserve requirement at 20%, banks hold no excess reserves, and no additional currency is he

ld. Instructions: In part a, round your answer to two decimal places. In part b, enter your answer as a whole number. a. What is the money multiplier? b. How much will the total money supply increase by if the Federal Reserve increases reserves by $400 million? $ million
Business
1 answer:
Drupady [299]2 years ago
4 0

The money multiplier is 5. And the total money supply increase by $2,000 million if the Federal Reserve increases reserves by $400 million.

Given,

The Federal Reserve sets the reserve requirement at 20%.

Banks hold no excess reserves, and no additional currency is held.

  • The money multiplier displays the amplitude of the change in the money supply as a result of the addition of new reserves to the banking system.
  • Banks use the money they are not obligated to retain in reserve to make loans, and the borrowed money shows up on other customers' deposit accounts.
  • In macroeconomics, the money multiplier is significant because it controls the money supply, which influences interest rates.
  • Because it affects monetary policy and the stability of the banking industry, it is also significant in the banking industry.

The money multiplier formula can be used to calculate the total amount of new deposits or money created.

Money multiplier = 1/reserve ratio

                            = 1/0.20

                            = 5

change in Total money supply = Money multiplier × change in reserves

                                 = 5 × $400 million

                                 = $2,000 million

Hence, The money multiplier is 5. And the total money supply increase by $2,000 million if the Federal Reserve increases reserves by $400 million.

Learn more about Federal Reserve Bank:

brainly.com/question/999538

#SPJ1

You might be interested in
The idea that the relationship between a worker and employer is voluntary and can be terminated at any time, by either party, is
kiruha [24]

Answer:

The correct answer is letter "A": employment-at-will doctrine.

Explanation:

The employment-at-will doctrine is an organizational practice in which employers could terminate labor relationships at any moment with no need for explanations and workers as well could cease the relationship without major reason. This practice aimed to avoid lawsuits between employers and workers.

4 0
4 years ago
Which option is an example of a debt-funding source
Furkat [3]

Answer:

The option which is an example of a debt funding source can be banks, credit unions, or any external lender.

Explanation:

  • Debt funding is when a company raises money by marketing bonds, bills and notes, etc. to the investors
  • It differs from equity financing which is selling shares of the company.
  • Debt funding must be paid back at an previously agreed date.
  • If the business goes under, then the lenders have more rights on the property that will be liquidated than the share holders.
7 0
3 years ago
A project manager is estimating costs on her video game development project. She utilizes total costs from a similar project tha
Mumz [18]

Answer:

A) Analogous Estimation

Explanation:

Analogous Estimation is the process of comparing past costs and expenses of projects to make estimations for the current projects. This is usually used when there is data limitation for accurate estimations on the current projects.

Parametric is where a unit rate is devised to calculate project costs comprising of several units.

Bottom up estimation deals with estimating smaller cost components and then using the sum of these components to make larger estimates.

Option D is based on rough estimates on the time and effort required for a project.

None of the other options thus take into account past work other than the analogous estimation technique.

Hope that helps.

3 0
3 years ago
What is meant by price discrimination and why is it important to monopolies?
Dmitry [639]

Answer:

A discriminating monopoly is a single entity that charges different prices—typically, those that are not associated with the cost to provide the product or service—for its products or services for different consumers. Non-discriminating monopolies, on the other hand, do not engage in such a practice.

4 0
3 years ago
Why is your amount owed considered when determining your credit score?
ankoles [38]

Answer:

Owing cash on credit accounts doesn't really mean you're a high-hazard borrower with a low credit Score. Notwithstanding, when a high level of an individual's accessible credit is been utilized, this can show that an individual is overextended, and is bound to make late or missed installments.

The amount owed on different accounts decides 30% of the FICO score. Aside from the general amount owed, the FICO scores think about the amount claimed freely on explicit accounts. On the off chance that you utilize a noteworthy part of the credit you are qualified for, it can negatively affect the FICO scores. Be that as it may, utilizing a less amount from as far as possible allowed can give you a superior score than not utilizing the credit by any stretch of the imagination.  

3 0
3 years ago
Other questions:
  • Wat is an example of the legal/regulatory environment surrounding advertising and promotional activities of businesses?
    14·1 answer
  • ____Can speed up the alcohol absorption
    13·1 answer
  • You are considering how to invest part of your retirement savings.You have decided to put $ 400 comma 000 into three​ stocks: 51
    9·1 answer
  • Why wouldn’t investment and saving flows at full employment always be equal?
    9·1 answer
  • Meal and Entertainment Expenses. Milt, a self-employed attorney, incurs the following expenses in 2019: Business lunches for cli
    5·1 answer
  • Which is not an advantage of a personal professional liability policy? Select one:
    9·1 answer
  • What advantage do preferred stockholders have over common stockholders
    11·1 answer
  • Andrew lives in New York City and runs a business that sells boats. In an average year, he receives $793,000 from selling boats.
    5·1 answer
  • Turner Company owns 10% of the outstanding stock of ICA Company. During the current year, ICA paid a $5 million cash dividend on
    12·1 answer
  • Glenrosa Company bought inventory from Monterosa Company, FOB destination. On December 31, the last day of the accounting year,
    5·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!