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erik [133]
3 years ago
11

In a fractional-reserve banking system, an increase in reserve requirements__________.

Business
1 answer:
juin [17]3 years ago
8 0

Answer:

b. decreases both the money multiplier and the money supply.

Explanation:

An increase in reserve requirements will decrease the money supply in the economy. This is because, banks and other financial institutions will have lower excess reserves to lend out to the public hence decreasing the overall amount of borrowing . Based on money multiplier, the explanation is based on the following equation;

Money multiplier = 1/ required reserve , if the required reserve increases then the fraction will be smaller. Therefore, the money multiplier will decrease too.

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The following account balances were taken from the 2021 adjusted trial balance of the Bowler Corporation: sales revenue, $485,00
jekas [21]

Answer:

Bowler Corporation

Income Statement for 2021

Sales revenue                                    $485,000

Less Cost of goods sold                  ($248,000)

Gross Profit                                         $237,000

Less Expenses

salaries expense              $61,000

rent expense                    $36,000

depreciation expense     $46,000

miscellaneous expense  $28,000   ($171,000)

Net Income/ (Loss)                             $66,000

Explanation:

Income Statement shows the Operating performance of the the company over the financial period.

Income/loss = Sales - Expenses.

8 0
2 years ago
If the reserve requirement was 13% and a bank customer makes a deposit of $440 at the Springfield Bank, the initial result would
NARA [144]

Answer:

O a $382.8 increase in excess reserves and a $57.2 increase in required reserves.

Explanation:

Here is the complete question :

If the reserve requirement was 13% and a bank customer makes a deposit of $440 at the Springfield Bank, the initial result would be:

O a $57.2 increase in excess reserves and a $382.8 increase in required reserves.

O a $382.8 increase in excess reserves and a $57.2 increase in required reserves.

O a $57.2 increase in required reserves and a $2,944.6 increase in excess reserves.

O a $440 increase in required reserves and a $2.944.6 increase in excess reserves.

Reserves is the total amount of a bank's deposit that is not given out as loans

There are two types of reserves

  1. Required reserve
  2. Excess reserve

Required reserves is the percentage of deposits required of banks to keep as reserves by the central bank

Required reserves = reserve requirement x deposits

0.13 x $440 =  $57.20

Excess reserves is the difference between reserves and required reserves

$440 - $57.20 = $382.80

6 0
2 years ago
On December 31, Year 1, Ott Co. had investments in marketable debt securities as follows: Amotized Cost Market value Mann Co. $1
Ahat [919]

Answer:

$29,000

Explanation:

The Held-to-maturity securities to be carried at amortized cost

The available-for-sale & trading securities to be carried at fair value (FV).

Therefore, the investment portfolio is reported at the following amounts:

Mann Co.   $10,000 (Cost)

Kemo, Inc.  $10,000 (Fair value)

Fenn Corp. $9,000 (Fair value)

Total           $29,000

So, Ott's December 31, Year 1, balance sheet should report total marketable debt securities as $29,000

7 0
3 years ago
Maintaining good contact in a relationship is also known as the _______ of a relationship.
WITCHER [35]
Beginning of a rellationship
3 0
3 years ago
Economic activity in developing countries is limited at least in part due to limited investment. Investment is limited mostly du
Tpy6a [65]

Inflation is the economic condition in which the interest rate keeps increasing which is beneficial for the lenders. But not a fixed rate lender.

<h3 /><h3>What is Interest Rate?</h3>

Interest rate is the prevailing market rate which the lender of the money gets in return for the money provided as a loan.

If there is a fixed interest contract the lender will get the same percentage of return for the duration of contract, no matter the fluctuation of the interest rate in the market. This is not beneficial when the economy is facing inflation. As whatever be the rate in the market (definitely higher) the lender will get the same percentage of return.

However if there is a variable rate contract the rate is updated and the lender is paid at the updated interest rate. This is beneficial when the economy is facing inflation.

Learn more about interest rates at brainly.com/question/28142837

#SPJ1

4 0
1 year ago
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