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dedylja [7]
3 years ago
9

In a fractional reserve banking system: Group of answer choices banks create money by printing it. banks create money by making

loans. the size of M1 can only be a fraction of checkable deposits. banks are required to hold 100% of deposits as reserves.
Business
1 answer:
r-ruslan [8.4K]3 years ago
3 0

Answer:

the size of M1 can only be a fraction of checkable deposits.

Explanation:

fractional reserve banking system requires that a fraction banks receive as deposits from customers be kept as reserves with the central bank and the rest be made out as loans.

M1 consists of coins, demand deposits and currency in circulation. Banks determine the money in circulation by giving out loans. so the size of M1 can only be a fraction of checkable deposits.

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Choose the answer below that is consistent with the following data: Assume that velocity is 5, the quantity of output is 1,000 i
Nonamiya [84]

Answer:

(C) This economy will suffer from an increase in the price level at some point in the future.

Explanation:

Velocity of money is defined as the rate at which money is exchanged in an economy. It calculated the number of time money exchanges hands during transactions in the economy.

For example if two individuals have $50 each (total of $100) and they used the same money to perform total transactions of $500, the velocity of money will be 500/100= 5.

The formula for velocity of money is

Velocity of money = Gross domestic product/ Money supply

GDP (monetary value of output) = output * price

GDP= 1,000* $10= $10,000

Therefore

5 = 10,000/x

Cross-multiply

x= 10,000/5= $2,000

So money needed in the economy is $2,000. But the Federal reserve has created $3,000.

We have an excess cash of 3,000-2,000= $1,000 in the economy.

Since there is too much money in the economy people will spend more and there will be increase in demand. Supply will not be able to keep up with demand resulting in scarcity and an increase in prices. Eventually inflation will occur.

7 0
3 years ago
Apply concepts what would be the variables on a supply schedule alike and different
uysha [10]

it would be a to d, c to b, d to e

8 0
3 years ago
The one-year forward rate of the British pound is quoted at $1.60, and the spot rate of the British pound is quoted at $1.63. Is
mihalych1998 [28]

Answer:

discount; 1.8%

Explanation:

Calculation for the forward rate using this formula

forward rate=(F/S) - 1

Let plug in the formula

forward rate= ($1.60/$1.63) - 1

forward rate= -1.8 percent.

Therefore The forward DISCOUNT is 1.8 percent.

7 0
3 years ago
Willingness to pay Group of answer choices measures the value that a buyer places on a good. is the amount a seller actually rec
gtnhenbr [62]

Answer:

measures the value that a buyer places on a good.

Explanation:

A product can be defined as any physical object or material that typically satisfy and meets the demands, needs or wants of customers. Some examples of a product are mobile phones, television, microphone, microwave oven, bread, pencil, freezer, beverages, soft drinks, etc.

Willingness to pay measures the value that a buyer places on a good or product. Thus, when this value is high, the customer would ultimately buy a product and vice-versa.

5 0
2 years ago
Under which tab and group can you find the control to add a section to a presentation?
Tpy6a [65]

Answer: the answer is B

6 0
3 years ago
Read 2 more answers
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