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Neko [114]
4 years ago
5

Suppose the Federal Reserve increases the amount of reserves by $100 million and the total money supply increases by $500 millio

n.
a. What is the money multiplier?
b. Using the money multiplier from part a, how much will the money supply change if the Federal Reserve increases reserves by $50 million?
Business
1 answer:
dimulka [17.4K]4 years ago
7 0

Answer:

a.  The money multiplier is 5.

b. The Total money supply will increase by $250 million.

Explanation:

According to the given data we have the following:

Increase in amount of reserves by Fed = $100 million

Increase in money supply = $500 million

Therefore to Calculate the Money multiplier we have to use the following equation:

Increase in money supply = Increase in reserves×Money multiplier

So, Money multiplier = Increase in money supply/Increase in reserves

                                  = $500 million/$100 million

                                 = 5

a.  The money multiplier is 5.

If there is anIncrease in amount of reserves by Fed = $50 million  and the Money multiplier = 5 , therefore to Calculate increase in money supply we calculate the following:

Increase in money supply = Increase in amount of reserves by Fed * Money multiplier

                                            = $50 million  

                                           = $250 million

b. The Total money supply will increase by $250 million.

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To find p(a <= Z <= b) = F(b) - F(a)
P(X < 20) = (20 - 30.5)/3.4489
= -10.5/3.4489 
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= P(Z < -3.0444) from standard normal table
= 0.00117
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4 years ago
Harriet operates a coffee shop. One of her customers wants to buy two kinds of​ beans: Arabian Mocha and Colombian Decaf. If she
melomori [17]

Answer:

it will purchase

96 dollars of Arabian Mocha

and 48 dollars of Colombian Decaf

Explanation:

we build the equation system:

144 = x  + y \\ x = 2y

we replace the second expression on the first and solve for y

144 = (2y) + y

144 = 2y + 1y

144= 3y

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48 = y

now we solve for x

x= 2y

x= 2 times 48 = 96

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