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saw5 [17]
3 years ago
13

The money supply is $6,000,000, currency held by the public is $2,000,000 and the reserve-deposits ratio is 0.25. Find deposits,

bank reserves, the monetary base and the money multiplier. PART 2: In a different economy, vault cash is 1,000,000, deposits by depository institutions at the central bank are 4,000,000 the monetary base is 10,000,000 and bank deposits are 20,000,000. Find bank reserves, the money supply, and the money multplier
Business
1 answer:
Elenna [48]3 years ago
6 0

Answer:

Please find the detailed answer below.

Explanation:

PART 1:.

a. Deposit = money supply - currency held

$6,000,000 - $2,000,000

= $4,000,000

b. Bank reserve is reserve-deposit ratio x deposit

0.25 x $4,000,000

=$1,000,000

c. Monetary base = currency held + bank reserve

$2,000,000 + $1,000,000

=$3,000,000

d. Money multiplier= money supply/monetary base

$6,000,000/$3,000,000

=2

PART 2.

a. Bank reserve

$4,000,000 + $1,000,000

=$5,000,000

b. Money supply= currency held + bank deposit

Currency held= base - reserve

$10,000,000 - $5,000,000

= $5,000,000

Therefore money supply is

$5,000,000 + $20,000,000

=$25,000,000

c. Money multiplier= money supply/monetary base

$25,000,000/$10,000,000

=2.5

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Randy agreed to join a biology study group. When the study group leader gave him her phone number, he had nothing on which to re
NARA [144]

Answer:

Rehearsal

Explanation:

The process Randy used to encode the number into longer-term memory is called rehearsal

4 0
3 years ago
Consider a mutual fund with $260 million in assets at the start of the year and 10 million shares outstanding. The fund invests
Ugo [173]

Answer: $26; $28.057

Explanation:

Total value = $260 million in assets

Shares outstanding = 10 million

Dividends = $2.5 million

Fund value at the start of the year = \frac{Total\ value}{No.\ of\ shares\ outstanding}

                                                         = \frac{260}{10}

                                                         = $26

Fund value at the end of the year:

Dividend per share = \frac{Dividends}{No\ of\ shares}

                                = \frac{2.5}{10}              

                                = $0.25

Price gain at 9% with deduction of 1% of 12b-1

Fund value at the end of the year = $26 × 1.09 × (1 - 0.01)

                                                        = $28.057

4 0
3 years ago
After an extensive advertising campaign, the manager of a company wants to estimate the proportion of potential customers that r
spayn [35]

Answer:

1. Referring to Problem , the manager wants to know the value of the population so the manager uses the sample to estimate the population proportion.

a. True

2. Referring to Problem , point estimate of the population proportion is = 0.45.

a. True

3. Referring to problem , the sample proportion is = 0.45.

b. False

4. Referring to Problem, the manager wants to know the value for the population so the manager uses the sample to estimate the population value

b. False

5. Referring to Problem , the parameter of interest is 54/120 = 0.45.

a. True

Explanation:

a) Data and Calculations:

Sample of potential consumers = 120

Proportion of the sample who recognize the product = 54

Confidence level = 95%

Confidence interval = 0.36 to 0.54

Point estimate = 54/120 = 0.45

b) A point estimate of a population parameter estimates the population parameter as a single value.  The point estimate of the sample mean, x, is also the point estimate of the population mean, μ.  To get the sample proportion, one needs to know the population value.  The sample value divided by the population value gives the sample proportion.

7 0
2 years ago
The Sapote Corporation is a manufacturing corporation. The corporation has accumulated earnings of $450,000 and the corporation
Eduardwww [97]

Answer: $40,000

Explanation:

As this is a manufacturing company, they are exempt of Accumulated earnings tax of the amount of $250,000. Anything above that will be subject to an Accumulated Earnings tax rate of 20%.

Accumulated Earnings tax = 20% * (450,000 - 250,000)

Accumulated Earnings tax = 20% * 200,000

Accumulated Earnings tax = $40,000

3 0
3 years ago
High flyer, inc., wishes to maintain a growth rate of 16 percent per year and a debt-equity ratio of 0.90. the profit margin is
Xelga [282]

Answer: The dividend payout ratio is 46.19%.

We follow these steps in order to arrive at the answer:

We begin with the DuPont identity of RoE.

<u>DuPont Identity:</u>

RoE = Net Profit Margin * Asset Turnover Ratio * Equity Multiplier

Now,  

Equity Multiplier = \frac{1}{Debt Ratio}

And Debt Ratio is also expressed as:

Debt Ratio = \frac{D/E}{1+D/E}

where D/E represents the Debt-Equity Ratio.

Substituting the value of D/E ratio from the question in the debt ratio formula above we get,

Debt Ratio = \frac{0.9}{1+0.9}

Debt Ratio = \frac{0.9}{1.9}----(1)

Substituting (1) in the equity multiplier formula above we get,

Equity Multiplier = \frac{1}{\frac{0.9}{1.9}}

Equity Multiplier = \frac{1.9}{0.9}

Substituting Equity Multiplier from above and the relevant numbers from the question in the DuPont identity we get,

RoE = 0.048 * 1.08 * \frac{1.9}{0.9}

RoE = 0.10944

The relationship between RoE and earnings growth rate g is given by the following formula:

RoE = \frac{g}{(1-p)}, where p is the dividend payout ratio.

Plugging in the values in the formula above we get,

0.10944 = \frac{0.16}{(1-p)}

1-p = \frac{0.16}{0.10944}

1-p = 1.461988304

p = 0.461988304 or 46.19%

3 0
3 years ago
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