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Ede4ka [16]
3 years ago
13

If a country's money supply is $10 million, and there is only one bank where all of the people deposit their money. If the bank

holds 5% of the deposits as reserves, what is the money multiplier in this economy?
Business
1 answer:
Luden [163]3 years ago
7 0

Answer:

The money multiplier of the economy is 20

Explanation:

Money multiplier is the term of economics which is defined as the maximum amount, the money supply could rise grounded on the increase in the reserve in the system of banking.

The formula used for computing the money multiplier is as:

Money Multiplier = 1 / r

where

r is the reserve ratio that is 5%

So, putting the same value above:

Money Multiplier = 1 / 5%

Money Multiplier = 20

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The firm should decrease the amount of capital used.

Solution:

The wage rate is $12 per hour and capital is rented at $8 per hour.

The marginal product of labour is 45 units of output per hour and the marginal product of capital is 65 units of output per hour.

A manager hires labour and rents capital equipment in a very competitive

market.

The ratio of marginal product of labour and wage rate

= \frac{45}{12}

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If the cost ratio is higher, it means that the boss must minimize the volume of money involved in the manufacturing process.

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Refer below.

Explanation:

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She should use 28-point fonts for titles and 18-point fonts for body text.

6 0
3 years ago
Read 2 more answers
The basic principles of economics suggest that_________.
Montano1993 [528]

Answer:

Answer is option d, i.e. All of the above are correct.

Explanation:

All the given statements are correct.

Markets are considered to be the best way to organize economic activity, and this can be done by studying the market trends and various demands of the customers. This would help in assessing the estimation of supply that any organization would like to deliver to its respective customers. Similarly, the intervention of government and legal aspects are also important in maintaining both, the trade between the companies of different countries, and also if any organization fails to produce and deliver the required result.

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You expect to receive $20,000 at graduation one year from now. you plan on investing it at 6 percent until you have $100,000. ho
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The answer will be $120,000
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Typically, you will receive a very low interest rate on money you deposit in a bank. Interest rates on car loans and business lo
Pavlova-9 [17]

Answer: A bank complies with the necessary permits to manage the resources of its clients.

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