Answer:
In simple words, Asset transformation can be understood as the process of turning small denominational, instantly available, and generally riskless deposit accounts into lenders moderately risky, high denomination assets that are returned according to a specified schedule–from obligations (deposits) with distinct traits.
Commit to buy more in the future
Answer:
The correct answer is: Operating budget.
Explanation:
An operating budget is an estimate a business make of the expenses and revenue it plans to book in its ongoing operations. Operating budgets can also be used to forecast future operating corporate periods. This type of budget mainly includes the <em>number of sales expected in dollars</em>, <em>fixed and variable costs</em> as well as <em>operating expenses</em> such as loan payments or depreciation.
Answer: increase by $80 million, and the maximum money-lending potential of the commercial banking system will increase by $400 million
Explanation:
Based on the information given in the question, the money multiplier will be calculated thus:
Money multiplier = 1/Required reserve ratio
where,
Required reserve ratio = 20%
Money Multiplier will now be:
= 1/0.20
= 5
Therefore, the maximum money-lending potential will be:
= $80 million × 5
= $400 million
Therefore, the money supply will by $80 million, and the maximum money-lending potential of the commercial banking system will increase by $400 million
