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Romashka-Z-Leto [24]
3 years ago
5

Suppose the currency-to-deposit ratio is 0.25, the excess reserve-to-deposit ratio is 0.05, and the required reserve ratio is 0.

10.
1. Which will have a larger impact on the money multiplier: a rise of 0.05 in the currency ratio or in the excess reserve ratio?

2. Initially, the money multiplier is m = _____.

3. If the currency-to-deposit ratio rises to 0.30, the multiplier falls to m = _____.

4. If, instead, the excess reserve-to-deposit ratio rises, the multiplier will be m = _______.
Business
1 answer:
Lana71 [14]3 years ago
7 0

Answer:

Money multiplier, MM = (1 + Currency-deposit ratio) / (Currency-deposit ratio + Excess reserve ratio + Required Reserve ratio)

(a) Initially,

MM = (1 + 0.25) / (0.25 + 0.05 + 0.10) = 1.25 / 0.4 = 3.125

(b) Currency-deposit ratio = 0.3

MM = (1 + 0.3) / (0.3 + 0.05 + 0.1) = 1.3 / 0.45 = 2.89

(c) Excess reserve ratio rises to which number? MM cannot be computed unless exact number is provided.

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Business processes implement value chains or portions of value chains. Each value chain is supported by one or more business process. The information systems are then implemented in order to make the operation <span>run smoothly and productively.</span>
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a consumers goal in buying a good or service is to get the most out of his or her income, or to maximize total utility. this is
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Sergio gets a haircut from Amelia and writes a check to pay for it. In this transaction, the drawee is: a. the bank on which the
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Answer: the bank on which the check is drawn because it must pay the check. (A)

Explanation:

A Drawee is a banking and legal term that is used to describe the party which has been directed by the depositor to pay a certain amount of money to the person who is presenting the draft or check or draft.

A typical example is if when someone is cashing a paycheck. The drawer is the bank that cashes the person's check, the drawer is the employer or person who wrote the check, and the person cashing the check is the payee.

7 0
3 years ago
Knowledge Check 01 Zeta Corporation issues $100,000 of 8% bonds maturing in 10 years on January 1, Year 1, when the market rate
alexandr1967 [171]

Answer:

$106,595

Explanation:

Given:

Initial market rate = 9%

Dropped market interest rate, r = 7% per year

or

= 7% × [6 ÷ 12]

= 3.5% = 0.035

Remaining time, n = 9 years = 18 semi annual periods

Now,

Value of the bond at the retirement

= [ PVAF × Interest payment] + [ PVF × face value]

here,

Present value of annuity factor, PVAF = \frac{1 -(1+r) ^{-n}}{r}

or

PVAF = \frac{1 -(1+0.035) ^{-18}}{0.035}

or

PVAF = 13.189

And,

Interest payment = $100,000 × 8% × [6 ÷ 12 ]              [since, 8% bonds]

= $4000

Present value factor = \frac{1}{1.035^{18}}

= 0.538

par value = $100,000

= [13.189 × $40] + [0.538 × 100,000]

= 52,758.7316 + 53,836.114

= $106,595

Hence,

The correct answer is option $106,595

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