All categories

3 years ago

F banks kept 100 percent of deposits on hand as reserves, the reserve requirement ratio:

Business

1 answer:

Paraphin [41]3 years ago

7 0

Answer:

Option (B) is correct.

Option (D) is correct.

Explanation:

If banks kept 100 percent of deposits on hand as reserves, then this will indicate that all the deposited amount would be saved as reserves. Therefore, the reserve requirement ratio is 100% here which means that:

Reserve ratio = 100%

= 100 ÷ 100

= 1

and the money multiplier = 1 ÷ reserve requirement ratio

= 1 ÷ 1

= 1

Banks would not be able create new money by giving loans because the reserve requirement ratio is 100%.

You might be interested in

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

= 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 = $\frac{1 -(1+r) ^{-n}}{r}$

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

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

8 0

4 years ago

You are the president of a toy manufacturing company that has recently discovered its bendable action figures break too easily.

Alika [10]

Answer:

Proofread for punctuation errors (it's a must!!), Jot down reasons that explain the bad news (I think), Organize your ideas (I think)

Explanation:

I think: Jotting down the reasoning helps/support the information (specifically) the bad news. Organizing your ideas helps to keep everything you write on track and ideas you want to mention always start from check-point A to check-point B and so forth.... (It's my thoughts of an answer)

8 0

4 years ago

Gutierrez Company reported net income of $225,000 for 2017. Gutierrez also reported depreciation expense of $45,000 and a loss o

Anestetic [448]

Answer:

Gutierrez Company

Cash Flow statement

for the year 2017

Net Income 225,000

+ Depreciation 45,000

+ Decrease in receivable 15,000

+ Increase in payable 17,000

+ Decrease in prepaid expenses 4,000

Net cash flow from operating activities 306,000

Explanation:

Depreciation is an non cash expense so it will be added to the net profit for the calculation of cash flow from operating activities. Decrease in receivable, Increase in payable and decrease in prepaid expenses result in the inflow of cash. So, they are all added in the operating income value.

4 0

3 years ago

Peter Billington Stereo, Inc. Supplies car radios to auto manufacturers and is going to open a new plant. The company is undecid

nevsk [136]

Answer:

Peter Billington Stereo, Inc.

A. Based on the analysis of the volume after rounding the numbers to the nearest number, Dallas is best below and Detroit is best above 70,000 radios.

B. With Dallas's fixed costs increased by 10%, Dallas is best below and Detroit is best above 56,000 radios.

Explanation:

Identify total costs at various volumes as follows:

Total costs, TC = Variable Cost, VC + Fixed Cost, FC

At 14,000 units:

a) Dallas' TC = VC = $28 x 14,000 + $560,000 = $952,000

b) Dallas' TC with 10% increase in FC = $28 x 14,000 + $616,000 = $1,008,000

c) Detroit's TC = $24 x 14,000 + $840,000 = $1,176,000

At 56,000 units:

a) Dallas' TC = $28 x 56,000 + $560,000 = $2,128,000

b) Dallas' TC with 10% increase in FC = $28 x 56,000 + $616,000 = $2,184,000

c) Detroit's TC = $24 x 56,000 + $840,000 = $2,184,000

At 67,200 units:

a) Dallas' TC = $28 x 67,200 + $560,000 = $2,441,600

b) Dallas' TC with 10% increase in FC = $28 x 67,200 + $616,000 = $2,497,600

c) Detroit's TC = $24 x 67,200 + $840,000 = $2,452,800

At 70,000 units:

a) Dallas' TC = $28 x 70,000 + $560,000 = $2,520,000

b) Dallas' TC with 10% increase in FC = $28 x 70,000 + $616,000 = $2,576,000

c) Detroit's TC = $24 x 70,000 + $840,000 = $2,520,000

At 153,993 units:

a)Dallas' TC = $28 x 153,993 + $560,000 = $4,871,804

b) Dallas' TC with 10% increase in FC = $28 x 153,933 + $616,000 = $4,927,804

c) Detroit's TC = $24 x 53,993 + $840,000 = $4,535,832

5 0

3 years ago

When Ruth was hired by Graham Services Inc. to head its customer service operations, she was told that her role involved supervi

Degger [83]

Answer:

Management.

Explanation:

The organizational management function corresponds to the set of functions related to the control, planning, coordination and application of principles at all organizational levels, using the best strategy of analysis of human and financial forces so that integrated form the set that will help the company to achieve organizational goals and objectives.

Being a leader is not an easy task, it takes experience and an attitude towards solving the needs and supervision of employees through an ethical and respectful posture, as well as having the tranquility to deal with different people, as well as the skills to integrate technical and social processes of the organization.

4 0

4 years ago