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faltersainse [42]
3 years ago
10

A bank has $770 million in checkable deposits. The bank has $85 million in reserves. The bank's required reserves are ________ a

nd its excess reserves are ________. Group of answer choices $85 million; $0 $770 million; $85 million $685 million; $8.5 million $77 million; $8 million
Business
1 answer:
fenix001 [56]3 years ago
3 0

Answer:

The correct answer is letter "D": $77 million; $8 million.

Explanation:

The U.S. Federal Reserve (Fed) establishes a minimum amount of money banks must have in front of unexpected demand. That minimum is called Bank Reserve. <em>The current bank reserve set by the Fed is 10% of the bank's demand and checking deposits. </em>

Excess reserves <em>is the amount of money banks have on top of the bank reserve</em> that cannot loan. As banks do not profit in interest with that amount of money, they do not tend to have much excess reserves.

In the case:

  • Bank required reserve = $770,000,000 x 10%
  • Bank required reserve = $77,000,000 = $77 million

  • Excess reserve = $85,000,000 - $77,000,000
  • Excess reserve = $8 million
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DanielleElmas [232]

Answer: To afford to retire

                       

Explanation: The life cycle theory was established by Modigliani in 1957. This theory states that a rational individual manages its expenses with the motive of saving sufficient amount till his or her retirement.

As per this theory, the individual consumes almost same amount of income which leads to the situation of borrowing in times of low income and savings in times of high income.

However the minor differences leads to savings high than borrowings in times of low income the individual significant lowers his or her capital expenditure.

4 0
3 years ago
_____ leadership seeks information, opinions, and preferences, sometimes to the point of meeting with the group, leading discuss
never [62]
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4 0
2 years ago
Paula is considering the purchase of a new car. She has narrowed her search to two cars that are equally appealing to her. Car A
wolverine [178]

Answer:

Paula should purchase car B.

Explanation:

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If instead she purchases car B, she will need to finance $20,200 for 3 years and her monthly payments will be $447.11. Total payments = $447.11 x 48 = $21,461.28.

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6 0
3 years ago
Dividends paid is equal to
scoundrel [369]

Answer:

B . Free cash flow less cash provided by operations and capital expenditures.

Explanation:

In Business, dividends can be defined as share of profits and retained earnings that a publicly listed company pays out to its investors or shareholders for investing into the business venture.

Dividends paid is equal to free cash flow less cash provided by operations and capital expenditures.

Free cash flow isn't reported on the statement of cash flows and it is the cash provided by operations less capital expenditures and cash dividends.

7 0
3 years ago
A significant improvement in auto technology will: A. Shift the supply of cars out and to right, decreasing the equilibrium pric
Y_Kistochka [10]

Answer:

A. Shift the supply of cars out and to right, decreasing the equilibrium price of cars, but increasing the equilibrium quantity.

Explanation:

The effect of technology on supply is that it will shift supply to the right. As cost of production reduces, producers can have more output at the same cost.

There will be excess supply (surplus), so customers will pay less for the product.

The equilibrium quantity will also increase as more cars are available in the market.

This is illustrated in the attached diagram. Equillibrum price reduces from P1 to P2. The equillibrum quantity increases from Q1 to Q2.

Government can influence cost of production through taxes, regulations and subsidies. Therefore they also influence shift of supply curve.

5 0
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