1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
umka21 [38]
3 years ago
6

When a central bank increases bank reserves by $1, the money supply rises by more than $1. The amount of extra money created whe

n the central bank increases bank reserves by $1 is called the money multiplier. The initial money supply is $1000, of which $500 is currency held by the public. The desired reserve-deposit ratio is 0.2. Find the increase in money supply associated with an increase in bank reserves of $1, $5, and $10. What is the money multiplier for this economy?
Business
1 answer:
andre [41]3 years ago
4 0

Answer:

Money multiplier for this economy is 5

Explanation:

Initial bank reserves = reserve deposit ratio * $500 = 0.2 * $500 = $100

1) increase in bank reserves by $1 , bank reserve deposit increases from $500 to $101 / 0.2 = $505 and the money supply increases by $505 - $500 = $5

2)  increase in bank reserves by $5 , bank reserve deposit increases from $500 to $105 / 0.2 = $525 and the money supply increases by $525 - $500 = $25

3)  increase in bank reserves by $10 , bank reserve deposit increases from $500 to $110 / 0.2 = $550 and the money supply increases by $550 - $500 = $50

as money supply rises by 5 times the increase in bank reserves , the money multiplier in this economy is 5.

You might be interested in
Faye files a suit in a state court against Gas Station Stop, claiming employment discrimination. Gas Station loses the suit and
densk [106]

Answer:

a.

Explanation:

Based on the information it can be said that in this scenario either party can appeal the decision to the United States Supreme Court if a federal question is involved. This means that there is an issue within the case that involves the constitution or other federal laws. These types of issues are cause for being able to take the case to the Supreme court.

7 0
2 years ago
Kelly’s Jewelry has the following transactions during the year: total jewelry sales = $640,000; sales discounts = $14,500; sales
pochemuha

Answer:

$559,020

Explanation:

The computation of net sales is shown below:-

Total sales = $640,000

Sales discount = $14,500 + $1,450

= $15,950

Sales return = $39,000 + $4,680

= $43,680

Sales allowance = $19,000 + $2,530

= $21,350

So,

Net sales = Total sales - Sales discount - Sales return - Sales allowance

= $640,000 - $15,950 - $43,680 - $21,350

= $559,020

Therefore for computing the net sales we simply applied the above formula.

8 0
3 years ago
postal express is considering the purchase of a new sorting machine. the sales quote consists of quarterly payments of $37,200 f
Cloud [144]

The five-year sales quote includes quarterly payments of $37,200 at a 7.6% interest rate. The price of the acquisition is $614,184.40.

<h3>Do you mean by PMT payment?</h3>

PMT stands for "payment," therefore the name of the function. A PMT method can estimate your monthly payments, for instance, if you are looking for a $30,000 car loan with a two-year term and an annual interest rate of 7%.

<h3>In the fv formula, what is PMT?</h3>

PV = present value, and FV=PMT(1+i)((1+i)N - 1)/i Future Value (FV) Payment per period (PMT) I = percent per period interest rate N is the number of cycles.

Quarterly Payment = PMT = $37,400

Interest Rates = r = 7.6% per year = 0.076 per year = 0.076 / 4 = 0.019 per quarter

Number of years = 5 years

Number of Payment = n = 5 years x 4 quarters per year = 20 quarters

PV = PMT x (1 - [1 / (1 +r)^n]) / r

PV = $37,200 x (1 - [1 / (1 +0.019)^20]) / 0.019

PV = $614,184.40

Learn more about PMT: brainly.com/question/12890163

#SPJ1

5 0
1 year ago
Suppose the current market price of corn is $3.75 per bushel. Your firm has a technology that can convert 1 bushel of corn to 3
Aleks04 [339]

Answer:

At 1.783 or more, the conversion yield better gain than sales the corn

Explanation:

The ethanol conversion become attractive if the cost for doing the conversion are lower than the sale revenue for the product.

<u>total cost: raw materials + conversion cost</u>

corn price:           $  3.75

conversion cost:  $  1.60

Total cost:            $  5.35

<u>output: gallon of ethanol per bushel</u>

3 gallons of ethanol per bushel

total cost / output = 5.35/3 = 1.783 cost per gallon

5 0
3 years ago
Operations management moves from knowing the needs of consumers to actually satisfying those needs.a) trueb) false
Mariana [72]

Answer:

<u>True</u>

<u>Explanation:</u>

Remember, no business operations would exist if there aren't any identified customer needs to solve.

Also, we need to bear in mind that Operations management activities are done in any business in other to efficiently (profitably) process raw materials,  labor, etc into the goods and services needed by consumers.

8 0
2 years ago
Other questions:
  • Have you ever done the right thing even when others wanted you to do something else? if so, please describe the situation
    9·1 answer
  • a. Balance sheet accounts are arranged into ______ general categories. b. Common Stock and Dividends are examples of ______ acco
    9·1 answer
  • LO 8.5Identify several causes of a favorable material quantity variance.
    13·1 answer
  • Ferris Company began January with 7,000 units of its principal product. The cost of each unit is $8. Merchandise transactions fo
    12·1 answer
  • Walkane Juices is planning to launch a line of flavored beverages. It encourages consumers to take a $1,000,000 Taste Challenge.
    15·1 answer
  • The quantity demanded of Good A has recently increased by 2% in response to an increase in income. By how much must income have
    10·1 answer
  • Why are slide presentations universal in business environments?
    5·1 answer
  • If capital rents for $25 per unit per hour, labor can be hired for $9 per unit per hour, the level of total factor productivity
    15·1 answer
  • Amy and Hobbes are married and file a joint return. Their three children are 7, 9, and 18 years old. Their modified AGI is $58,0
    12·1 answer
  • The treasurer for Rahm Corp. was preparing a bank reconciliation as of September 30, 2017. The following items were identified:
    7·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!