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MissTica
3 years ago
7

Suppose you have $12000 in your checking account. You withdraw $500 cash from your account and hide it under your pillow for fut

ure use. If the required reserve ratio is 10%, then what will be the maximum impact on money supply today as a result of your action?
Business
1 answer:
melamori03 [73]3 years ago
7 0

Answer:

money supply decreases by $4,500

Explanation:

Money multiplier (m) = 1 ÷ Reserve required ratio

                                  = 1 ÷ 0.1

                                  = 10

Initial amount of deposits = $12,000

Required reserves = 10% of $12,000

                               = $1,200

Therefore,

Amount that is loaned out by bank = $12,000 - $1,200

                                                          = $10,800 (Monetary base)

Hence, the money supply before the withdrawal is as follows:

= Money multiplier × Monetary base

= 10 × $10,800

= $108,000

When $500 cash withdraw from the bank account:

The amount of deposits reduce to $11,500

Required reserves = 10% of $11,500

                               = $1,150

Therefore,

Amount that is loaned out by bank = $11,500 - $1,150

                                                          = $10,350 (Monetary base)

Hence, the money supply before the withdrawal is as follows:

= Money multiplier × Monetary base

= 10 × $10,350

= $103,500

Reduction in the money supply:

= $108,000 - $103,500

= $4,500

Therefore, the money supply decreases by $4,500.

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Rashid [163]

Answer: $57,000,000

Explanation:

The employees purchased at a 20% discount which means that this 20% discount is the amount that would have to be covered by the company's pretax earnings:

= 19,000,000 * 15 * 0.2

= $57,000,000

<em>Martin's pretax earnings will be reduced by $57 million because the company would have to cover the discount on the shares. </em>

8 0
3 years ago
Which of the following is an example of consumer problem behavior?
Dahasolnce [82]

Answer:

E. Johnathan eats alone because he feels guilty about his binge-eating habits and gets worked up when waiters attend to him.

Explanation:

Johnathan is not happy with his habit of binging food.This made him to act like seating alone while eating and he gets worked up when he is attended by waiters

7 0
3 years ago
A firm can effectively use its operations function to yield competitive advantage through all of the following except
ira [324]

Answer:

The correct answer is b.setting equipment utilization goals below industry average.

Explanation:

A firm cannot achieve competitive advantage by setting its equipment utilization goals as this will not retain its customers.

If a firm wants to achieve competitive advantage it can achieve it by;

Addressing its customers concerns and customizes the products according to their needs.  

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4 0
3 years ago
If during 2009, the country of Sildavia recorded a GDP of $65 billion, interest payments of $15 billion, imports of $13 billion,
Vitek1552 [10]

Answer:

$36 billion

Explanation:

The computation is shown below:

For this question, we use the income approach for calculation the wages i.e shown below:

GDP = Interest payments + profits + rent + wages

$65 billion = $15 billion + $7 billion + $7 billion + wages

$65 million = $29 billion + wages

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3 0
3 years ago
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tresset_1 [31]

Answer:

diluted EPS = $2.05

Explanation:

diluted earnings per share = net income / (weighted common stocks outstanding + diluted shares).

net income = $800,000

weighted common stocks outstanding:

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5 0
3 years ago
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