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Ierofanga [76]
4 years ago
15

If a bank decides that it wants to hold​ $1 million of excess​ reserves, what effect will this have on checkable deposits in the

banking​ system? Assume that the required reserve ratio on checkable deposits is​ 10% and the​ public's holdings of currency do not change.
Business
1 answer:
inessss [21]4 years ago
4 0

Answer:

checkable deposits will decrease by $10 million

Explanation:

the money multiplier = 1 / reserve ratio = 1 / 10% = 10

if the bank decides to hold an extra $1 million in reserves, the effect on the money supply will be = -$1 million x 10 = -$10 million or a $10 million decrease

the money multiplier measures the banks' capacity to "create money" through borrowing, e.g. a person deposits $100 dollar, then the bank borrows $90 to another client, and the second client's money is also used to lend more money to a third client and so on.

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J. S. Bach's organ chorale prelude "Jesu, Joy of Man's Desiring" is an example of ______ texture.
drek231 [11]
The answer is "polyphonic" 

Hope this helps:)
3 0
3 years ago
Read 2 more answers
Jane's Donut Co. borrowed $198,000 on January 1, 2018, and signed a two-year note bearing interest at 14%. Interest is payable i
Virty [35]

Answer:

$27,720

Explanation:

The computation of the interest expense

= Principal amount × rate of interest × number of months ÷ (total number of months in a year)  

= $198,000 × 14% × (12 months ÷ 12 months)

= $27,720

Basically we applied the simple interest formula to determine the interest expense and the borrowed amount is taken on January 1, 2018 and the interest expense should be reported on December 31, 2018 that comprises of 12 months

7 0
3 years ago
If policymakers attempt to offset a favorable inflation shock with monetary _____, the resulting long-run equilibrium will be at
alexira [117]

Answer:

1. Easing

2. A higher

Explanation:

An adverse inflation shock when modeled is the upward shift of the Short run aggregate supply curve, this brings about higher inflation and causes a lowering of output.

The self-correcting mechanism of the economy will cause inflation to decrease gradually until the economy is back in long-run equilibrium at the original level of inflation.

If there is an intervention with monetary easing, aggregate demand will shift forward and a long-run equilibrium will be established where inflation remains at the higher level.

4 0
3 years ago
Information technology unit test
Ulleksa [173]
What’s on the information technology unit test?
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3 years ago
Matt's retail store offers all its products at $2 lesser than its competitors throughout the year. The store never runs any prom
posledela

Answer:

The everyday low pricing policy is the policy that Matt's retail store is following.

Explanation:

Everyday low pricing policy is the kind of a pricing strategy in which any company or firm keeps the prices of its products at low over a long period of time rather than putting any kind of sale or promotional activities. So here the consumers don't have to wait for the sale to start, the prices are already at everyday low. An important assumption to understand here is that in this kind of pricing strategy cost of production is assumed not be changed, that is why a company is able to implement this policy over a long period of time.

So therefore as here Matt's retail store is giving $2 lesser price for its product than its competitors , it means that Matt's retail store has applied everyday low pricing strategy.

7 0
3 years ago
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