Assume company x deposits $100,000 in cash in a commercial bank. If no excess reserves exist at the time this deposit is made and the reserve ratio is 20 percent, the bank can increase loans by a maximum of $500,000.
Reserve ratio = 20% = 20/100 = 0.25
Initial Money supply = (1/Reserve ratio)*New Deposit = (100,000/0.25) = $ 400,000
Reserve ratio = Rerserve / Deposit
=> Reserves = 0.25*100,000 = 25,000
Max Increase in Money Supply = Initial Money Supply + Reserves/ Reserve Ratio
= $ 400,000 + 100,000
= $ 500,000.
The term commercial bank refers to financial institutions that accept deposits, provide checking account services, issue various loans, and provide basic financial products such as certificates of deposit (CDs) and savings accounts to individuals and small businesses. refers to
Learn more about the commercial banks at
brainly.com/question/1238952
#SPJ4
Answer:
Net worth is the measure of the wealth of an entity, person, or corporation, as well as sectors and countries. Simply, net worth is defined as the difference between assets and liabilities. It is an important metric to gauge a company's health and it provides a snapshot of the firm's current financial position.
Answer:
dual mandate.
Explanation:
dual mandate -
It is the practice in which the elected officials serves in more than one elected or public position .
In Britain , this term is also referred to as double jobbing .
In some cases , the dual mandate is prohibited by the law , as in the case of the federal states , because the federal office holders are not allowed to hold state office .
Hence from the question information , the correct option is dual mandate .
Allocated to future accounting periods equally over the periods receiving the benefit.
