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1 year ago

Reserves change by $12 million, and the money supply changes by $60 million. what does the simple deposit multiplier equal?

1 answer:

8 0

Reserves change by $12 million, and the money supply changes by $60 million. 5 is the simple deposit multiplier equal.

simple deposit multiplier = ΔM/ΔR

= 60/12 = 5

The simple deposit multiplier assumes that banks hold no excess reserves, and households and corporations deposit the complete amount of every test in a monetary institution and no longer take out any as foreign exchange.

The deposit multiplier is also referred to as the deposit enlargement multiplier or the clean deposit multiplier. it is linked to the part of a financial institution's deposits that may be lent to borrowers. This lending hobby injects coins into the kingdom's cash delivery and enables financial hobby.

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3 years ago

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I think you made mistakes in the dates which i have corrected in the explanations----Prepare the journal entries to record the restricted stock on "January 1, 2017" (the date of grant), and "December 31, 2018"

Answer: Please see answer in explanation column

Explanation:

To record unearned compensation

Date Account titles and explanation Debit Credit

Jan 1, 2020 Unearned compensation $565,000

To Common stock ( 11,300 shares × $10) $113,000

To Paid in capital in excess of par - common stock $452,000

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Date Account titles and explanation Debit Credit

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To Unearned compensation $113,000

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