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Zina [86]
3 years ago
9

Suppose the banking system currently has $300 billion in reserves, the reserve requirement is 5 percent, and excess reserves are

$30 billion. What is the level of loans?
$5,400 billion

$5,100 billion

$270 billion
Business
1 answer:
Readme [11.4K]3 years ago
4 0

Answer:

$5,400 billion

Explanation:

The computation of the level of loans would be

We know that

Multiplier = 1 ÷ reserve ratio

               = 1 ÷ 0.05

               = 20

And the required reserve would be

= Currently reserves - excess reserve

= $300 billion - $30 billion

= $270 billion

Now the level of loan would be

= $270 billion × 20

= $5,400 billion

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Answer:

Money multiplier, MM = (1 + Currency-deposit ratio) / (Currency-deposit ratio + Excess reserve ratio + Required Reserve ratio)

(a) Initially,

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(b) Currency-deposit ratio = 0.3

MM = (1 + 0.3) / (0.3 + 0.05 + 0.1) = 1.3 / 0.45 = 2.89

(c) Excess reserve ratio rises to which number? MM cannot be computed unless exact number is provided.

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Borchardt Corporation has provided the following data concerning last month’s operations. Direct materials $ 29,000 Direct labor
skad [1K]

Answer: $178,000

Explanation:

The following information can be derived from the question:

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Then the manufacturing cost will be:

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Answer:

2 times

Explanation:

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