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notka56 [123]
3 years ago
15

An economy has a monetary base of 1,000 $1 bills. Calculate the money supply in scenarios a - d. Then answer part e. a. All mone

y is held as currency Money supply = $ b. All money is held as demand deposits. Banks are required to hold 100% of deposits as reserves. Money supply = $ c. All money is held as demand deposits. Banks hold 20% of deposits as reserves. Money supply = $ d. People hold equal amounts of currency and demand deposits. Banks hold 20% of deposits as reserves. Round to the nearest dollar. Money supply = $ e. The central bank decides it should increase the money supply by 10%. By how much should it increase the monetary base to accomplish this goal in each scenario? Monetary base increase = $
Business
1 answer:
natka813 [3]3 years ago
6 0

Answer:

a. If all money is held as currency then the banks create no additional money and money supply is = $1,000

b. If all money is in banks but the banks are not loaning it out as they are keeping it in reserves, no loans will be created. Supply is still $1,000.

c. The total money is the amount of deposits multiplied by the money multiplier.

Money Multiplier = 1/required reserve

= 1/0.2

= 5

Supply = 1,000 * 5

= $5,000

d. With equal amounts held as currency and demand deposits, the money multiplier will be;

= \frac{1 + Currency deposit ratio}{ Reserve requirement + Currency deposit ratio}

Currency deposit ratio is 1 as the ratio to demand deposits is equal which = 1.

= \frac{1 + 1}{1 + 0.2}

= 1.67

Money supply = 1,000 * 1.67

= $1,670

e. If the Central bank increases the money supply by 10% then the monetary base would increase by;

= 10% * 1,000

= $100

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The following selected transactions were completed during March of the current year: March 1 Billed customers for fees earned, $
Tcecarenko [31]

Answer:

The following selected transactions were completed during March of the current year: March 1 Billed customers for fees earned, $54,100. 4 Purchased supplies on account, $1,250. 8 Received cash from customers on account, $43,800. 11 Paid creditors on account, $600.

Explanation:

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6 0
2 years ago
what term is used to describe the approach taken by companies such as magicleap.com where physical and digital objects are able
timofeeve [1]

The technological approach which enables the coexistence of digital and physical objects using immersive technology is a middle ground between Augmented and virtual reality called MIXED REALITY.

Augmented reality technology is capable of producing a real world representation of physical world using 3D representation.

Virtual reality on the other hand creates a visual experience of a computer simulated digital environment. Virtual reality usually requires the use of headset and sensors.

Mixed reality technology is inbetween virtual and Augmented reality as it allows the interaction between virtual and physical objects in real time. Applications of mixed reality the DAQRI smart helmet which allows communication and collaboration between teams in field such as Engineering and Architecture.

Therefore, mixed reality allows the coexistence of the virtual and physical world on real time.

Learn more :brainly.com/question/22621708?referrer=searchResults

8 0
2 years ago
Home / study / business / economics / questions and answers / 1.if individual income tax accounts for more total ...
Lapatulllka [165]
1) this is because the households that make 40 000 dollars a year or less, while not paying income taxes at all, pay payroll taxes.

2)What we see here is that the government collects more than it spent (0.2 billion) - we call this situation a budget surplus.
6 0
3 years ago
Solar Innovations Corporation bought a machine at the beginning of the year at a cost of $25,000. The estimated useful life was
tatiyna

Answer:

The correct answer is Double-declining-balance.  The highest net income in year 2 is 6000.

This higher net income don´t mean the machine was used more efficiently under this depreciation method.

Explanation:

In the file attached you will find a depreciation schedule for each of the alternative methods.  

Each method need different calculus.  

Straight-line

depreciation expense=(Original Value  -Residual Value)/Useful life=

depreciation expense=4400

Units-of-production

estimated productive life  10000

Units of Production Rate=(Original Value  -Residual Value)/estimated productive life=2,2

Double-declining-balance.

Depreciation rate = 1/useful life *100= 20,00%

Download xlsx
4 0
3 years ago
Holtzman Clothiers's stock currently sells for $31.00 a share. It just paid a dividend of $1.00 a share (i.e., D0 = $1.00). The
Llana [10]

Answer:

1. Year 1 expected value = $32.24

2. Required rate of return = 7.35%

Explanation:

1. For computing the stock price which is expected 1 year from now is shown below:

= Current Price × (1+rate)^number of years

= $31 × (1+0.04)^1

= $31 × 1.04

= $32.24

Hence, the expected 1 year value of stock price is $32.24

2. The required rate of return is computed by using an formula which is shown below:

= (Current Year dividend ÷ Current stock price)+ growth rate

where,

current year dividend is = D1

And, D1 = DO × (1+g)

where,

DO = previous dividend share

g = growth rate

So, $1 × (1+0.04)

= $1 × 1.04

= $1.04

Now apply these values to the above formula

So, required rate of return is equals to

= ($1.04 ÷ $31) + 0.04

= 7.35%

Hence, the required rate of return is 7.35%

5 0
3 years ago
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