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1 year ago

Look at the scenario money creation. how much of the $1,000 deposit is the bank required to keep in reserves?

Business

1 answer:

madam [21]1 year ago

3 0

The quantity of the $1,000 deposit is the bank required to keep in reserves is 20%.

<h3>What is a reserve deposit?</h3>

A reservable deposit would be any bank deposit subject to bank reserves established by the Federal Reserve Bank of the United States.

Some key features of reserve deposit are-

Through the mechanism of fractional reserve banking, such a deposit could be used in part as a loan.
The remaining portion, as established by the Fed's bank reserves, must be kept by bank & made available for prompt withdrawal upon request.
A reservable bank is a banks deposit that is subject to the reserve requirement guidelines of the Federal Reserve.
Transaction (checking) savings account, savings accounts, as well as non-personal time deposits are all examples of reservable deposits.
Sweep accounts, often known as money market funds, is non-reservable deposit account that generate a greater rate of interest than reservable deposit accounts.

To know more about the reservable deposit, here

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You wish to buy a cabin in 15 years. TODAY, the cabin costs $150,000. You believe the price of the cabin will inflate at 4% annu

vfiekz [6]

Answer:

I will need to invest 64,669.73 dollars now.

Explanation:

We will calcualte the future value of the cabin considering the inflation:

$Principal \: (1+ inflation )^{time} = Amount$

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time 15 years

inflation 0.04000

$150000 \: (1+ 0.04)^{15} = Amount$

Amount 270,141.53

Then we calculate the present value of the lump sum at 15 years discounted at 10% which is the yield of the funds

$\frac{Maturity}{(1 + rate)^{time} } = PV$

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time 15 years

rate 0.10

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PV 64,669.73

we would need to deposit 64,669.73 today to get enough cash to purchase the bcabin in 15 years.

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3 years ago

Suppose all of the major computer manufacturers announced that beginning next month there would be major price reductions on the

Nesterboy [21]

Answer:

The correct answer is "decrease".

Explanation:

This would cause the current demand for computers to decrease because consumer expectations would be displaced in the long run by waiting for computer prices to decrease before going to buy them. This behavior is due to the advance announcement of the manufacturers.

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3 years ago

Nate is going to the grocery store to pick up a few things. he decides not to write a list and instead repeats the eight items h

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Rehearsal.

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3 years ago

Assuming that total dividends declared in 2017 were $64,000, and that the preferred stock is not cumulative but is fully partici

myrzilka [38]

Answer:

$40,235

Explanation:

Dividend distributed to preferred share is based on the predetermined rate associated with these share. When the dividend is declared preferred share dividend is paid first. The remainder is distributed between the common stockholders.

Dividend Declared = $64,000

Preferred Dividend = $100,000 x 7% = $7,000

Participation

Preferred Shares = $100,000 / $20 = 5,000 shares

Common shares = 12,000 shares

Total Shares = 12,000 + 5,000 = 17,000 shares

on Pro-rata basis

Participation dividend to preferred stockholder = ($64,000 - $7,000) x 5000 / 17000 = $16,765

Dividend to common stock holders = $64,000 - $7,000 - $16,765 = $40,235

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3 years ago

Which of the following is an objection to relying solely on Return on Market Investment (ROMI) results?

masha68 [24]

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3 years ago