1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
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

You might be interested in
Which is not a common product marketing techniques?
KatRina [158]

The four common product marketinf techniques are Product, Placement, Promotion, and Price. they are referred to as four elements of marketing. in this case, preparation is not included in the group. Preparation is not a marketing technique as this is a necessity for all businesses. 
6 0
3 years ago
Comfy Cozy Chairs makes and sells rockers. Each rocker requires $45 of direct materials and $37 of direct labor. Variable manufa
igomit [66]

Answer:

the unit product cost using absorption costing is $119

Explanation:

The computation of the unit product cost using absorption costing is given below:

= Direct material per unit + direct labor per unit + variable manufacturing cost per unit + fixed manufacturing cost

= $45 + $37 + $8 + ($58,000 ÷ 2000)

= $119

Hence, the unit product cost using absorption costing is $119

8 0
3 years ago
The agricultural adjustment act (aaa) attempted to solve the "farm problem" by providing federal loans based on crops held in st
Brums [2.3K]
The AAA payed farmers to reduce their production in order to raise prices.
7 0
3 years ago
The techniques used by systems analysts to identify or extract system problems and solution requirements are known as
OlgaM077 [116]

Answer: requirements discovery

Explanation:

The techniques used by systems analysts to identify or extract system problems and solution requirements are known as requirements discovery.

A requirements discovery is simply defined as the process and tools that are typically used to identify the system requirements for the users of a system that has been proposed.

A system requirement helps to describe the desires and needs for an application or a system. The system requirement describes the features, functions, and constraints.

7 0
2 years ago
ATech has fixed costs of $7 million and profits of $4 million. Its competitor, ZTech, is roughly the same size and this year ear
NISA [10]

Answer:

a. ZTech will have a higher operating leverage because it has a higher fixed cost.

b. ZTech will have a higher profit since it has a higher operating leverage if the economy strengthens.

Explanation:

Operating leverage measures the the extent to which a firm uses fixed cost to finance its operations. The higher the fixed cost, the higher the degree of operating leverage

If the economy strengthens, the firm with a higher degree of operating leverage earns a higher profit.

8 0
3 years ago
Other questions:
  • After researching the competitors of EJH​ Enterprises, you determine that most comparable firms have the following valuation​ ra
    6·1 answer
  • Plus Company uses the estimate of receivables method of accounting for uncollectible accounts. Plus Co. estimates that $4412 of
    11·1 answer
  • During the period, labor costs incurred on account amounted to $175,000, including $150,000 for production orders and $25,000 fo
    10·1 answer
  • Identify the careers that require a college degree
    6·1 answer
  • Who receives the good or service from first come, first served. for econmics
    6·1 answer
  • Some discount stores put products in large bins and let consumers hunt and find bargains.
    13·1 answer
  • Profits are important so businesses can retain employees attract investors and contribute to the​
    14·1 answer
  • "K has a $10,000 traditional whole life policy with a loan outstanding" of $1,000 and a 5% interest charge. At the end of the fi
    6·1 answer
  • Catamount Company had current and accumulated E&P of $500,000 at December 31, 20X3. On December 31, the company made a distr
    12·1 answer
  • During the year, Walt who is self-employed travels from Seattle to Tokyo, Japan, on business. His time was spent as follows: two
    9·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!