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iVinArrow [24]
3 years ago
10

Suppose you win on a scratch‑off lottery ticket and you decide to put all of your $ 3,500 winnings in the bank. The reserve requ

irement is 5 % . What is the maximum possible increase in the money supply as a result of your bank deposit?
Business
1 answer:
Katarina [22]3 years ago
5 0

Answer:

$3,325

Explanation:

Reserves are maintained to fulfil the customers withdrawal requirement. It is imposed by the State bank over the Banks to hold a specific percent of cash as reserves. Bank hold the reserves and invest or utilize the residual in the market.

In this question 5% of $3,500 will be reserved and the remaining $3,325 will be available for the money supply in the market in different forms.

the maximum possible increase in the money supply as a result of your bank deposit is $3,325.

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4 0
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What are some of the advantages and disadvantages of choosing a federally insured account.? help​
Wewaii [24]

the advantages of the federally insured account is that

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The disadvantages is that:

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5 0
4 years ago
If the reserve ratio is 5% and the change in reserves is $10 billion, then the money multiplier is _____ and the change in the m
Ahat [919]

The money multiplier is 20 and the change in the money supply is $200 billion.

<h3>What is the money multiplier and change in money supply?</h3>

The money multiplier is the inverse of the reserve ratio. Reserve ratio is the percentage of deposits that is required of commercial banks to keep as reserves. The lower the ratio, the higher the increase in money supply.

Money multiplier = 1 / reserve ratio

1/5%

1 / 0.05 = 20

The change in money supply is the product of the money multiplier and the change in reserve.

Change in money supply = money multiplier x change in reserves

20 x $10 billion = 200 billion

To learn more about reserve ratio, please check: brainly.com/question/6831267

#SPJ1

7 0
2 years ago
. Which of the following is not a way business markets and consumer markets differ?
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Answer:

Product Research.

Explanation:

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Whereas there is a Consumer Market or  a Business Market the same process must be developed for product Research purposes.

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3 years ago
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Name two new developments in the way Americans work.
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Economic development<span> is the sustained, concerted actions of policy makers and cummities </span><span>that promote the standerds of livng </span><span>and ecnominc health</span><span>of a specific area. </span><span>
</span>
6 0
3 years ago
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