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Kamila [148]
3 years ago
6

Suppose a banking system has $120 million in deposits, a required reserve ratio of 20 percent, and total bank reserves for the w

hole system of $100 million. Then the potential deposit creation for the whole system is equal to:
Business
1 answer:
Dmitry_Shevchenko [17]3 years ago
6 0

Answer:

$380 million

Explanation:

Given that,

Deposits = $120 million

Required reserve ratio = 20 percent

Total bank reserves = $100 million

Required reserve ratio refers to the portion of deposits that is kept with the reserve bank.

Required reserves:

= Deposits × Required reserve ratio

= $120 million × 0.2

= $24 million

Excess reserves:

= Total reserves - Required reserves

= $100 - $24

= $76

So, there is a excess reserves in this economy.

Money multiplier = 1/Required reserve ratio

                            = 1/0.2

                            = 5

Therefore, the total money creation potential of this deposit is as follows:

= Excess reserves × Money multiplier

= $76 × 5

= $380 million

Hence, an increase in deposit creation by $380 million.

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$1,200 is received at the beginning of year 1, $2,200 is received at the beginning of year 2, and $3,300 is received at the begi
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Answer:

Their combined future value will be 8,141.59.

Explanation:

Each deposit is invested at 12%, but for a different amount of years. So, the best thing would be to separate the three, calculate their value at the end of the third year for separated, and then obtain the grand total by adding up the results.

  • First deposit = 1,200. It is invested for three years. The value at the end of year 3 is 1,200*(1.12)^3 = 1,685.91
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Associated Breweries is planning to market alcohol-free beer. To finance the venture it proposes to make a rights issue at $10 o
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Answer:

Number of new shares:

= 100,000×(1÷2)

= 50,000

Amount of new investment:

= 50,000×$10

= $500,000

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= $500,000+100,000×$40

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Total number of shares after issue:

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Share price after issue:

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<h3>What is Organization?</h3>

Organization refers to the group of people working together in order to achieve the organizational goals. The goal of every organization is to maximize the profits for which it takes various activities.

In the above scenario, Dorian has started a cultural organization in a quality process. The changes made in any of the organization are rigid at first place.

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