10. Dixon Construction Company was awarded a contract to construct an interchange at the junction of U.S. 94 and Highway 30 at a
1 answer:
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Answer:
loanable amount after Fed operation = $950 M
Securities after fed operation = $50 M
attached below is the T-account table
Explanation:
Given data:
For assets : securities = $100 M , Loans = $800 M
For Liabilities : Constant demand deposit = $1000 M
difference between the assets and liability = $100 M and this makes the Banking system unbalanced hence the Banking system needs the intervention of the Fed. and the reduction in the required reserve ratio from 10% to 5% is the right action
How with the reserve ratio reduced to: 0.05
hence required Minimum required securities after operation = 0.05 * 1000 M = 50 M
Note : Total demand deposits = securities + loanable amount
therefore loanable amount after Fed operation = $1000 M - $50 M = $950
Attached below is the T-table
When both tables are compared it can be seen that there is a significant increase in the loanable amount after the Fed's operations and increase in Loanable amount transcends to increase in Monetary base
Answer:
$1,500
Explanation:
Given the compounding formula
And given an investment (P), made at 16% compounded annually (r), and an ending amount of $1,740 (A) at the end of the year (n = 1 year), the original amount invested (P) can be computed as follows.
= P = 1,740/1.16 = 1,500.
Therefore, the original investment was $1,500.