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
Svetach [21]
3 years ago
14

Suppose the required reserve ratio is 10% and the banking system initially has no excess reserves. If $20 billion in new currenc

y is deposited into the system, these new deposits will initially create excess reserves of: Group of answer choices $4 billion $200 billion $2 billion $18 billion $20 billion
Business
1 answer:
mixas84 [53]3 years ago
3 0

Answer:

$18 billion

Explanation:

A required reserve ratio refers to the fraction of the deposits received by a bank or financial institution that the regulatory authority requires the bank to hold as reserves and not loaning it out.

Excess reserves refers to reserves that is above the required reserved which held by a bank or financial institution and can can be loaned out. Excess reserve is therefore total deposit minus required reserve.

Since the required reserve ratio is 10% from the question, initial required reserve for the bank can therefore be obtained as follows:

Initial required reserve = 10% * Deposits = 10% * $20 billion = $2 billion

As result, we have:

Initial excess reserve = Deposit - Required reserve = $20 billion - $2 billion = $18 billion

Therefore, these new deposits will initially create excess reserves of <u>$18 billion</u>.

You might be interested in
Signal mistakenly produced 1,000 defective cell phones. The phones cost $65 each to produce. A salvage company will buy the defe
Contact [7]

Answer:

It is more profitable to continue to rework the phones and sell them.

Explanation:

Giving the following information:

Signal mistakenly produced 1,000 defective cell phones.

<u>The $65 per phone is a sunk cost. It will remain on both decisions, therefore, we will not take into account to make the decision.</u>

Sell as it is:

Income= 33*1,000= $33,000

Rework:

Costs= 88*1,000= $88,000

Sales= 144*1,000= $144,000

Total gain= $56,000

It is more profitable to continue to rework the phones and sell them.

3 0
2 years ago
What benefits do you expect to achieve from career exploration?
lidiya [134]
You expect to find and increase knowledge of  what really fits for you to do for the rest of your career life.
6 0
2 years ago
Richard Beck has a life insurance policy which he has modified to include an accidental death benefit payable to his son and dau
Ksju [112]

Answer:

The correct answer is number (1): double indemnity provision.

Explanation:

A double indemnity provision is added in life insurance to double the amount the beneficiaries of the policyholder receive in front of his or her death in an accident. Double indemnity provision does not cover events in which the policyholder dies because of natural reasons or when those individuals had hazardous jobs. Premiums are higher with a double indemnity provision.

7 0
3 years ago
Match the items with their descriptions.
Studentka2010 [4]

Answer:

a2,b4,c3,d1

Explanation:

7 0
3 years ago
Pelican Inc., a multinational oil corporation headquartered in Denmark, conducts its operations in various nations by establishi
Ivanshal [37]

Answer:

The correct answer is letter "B": franchising.

Explanation:

A Franchise is a business where one person, the <em>franchisee</em>, gains access to the proprietary knowledge, processes, and trademarks of a <em>franchisor</em>. In return for a royalty, the franchisee acquires the right to market a product or service under an existing brand name.

The customer is already familiar with the brand, so there is no need to invest additional resources to promote the product.

6 0
3 years ago
Other questions:
  • Which of the following would a macroeconomist consider as investment? A. Marisa purchases a bond issued by Proctor and Gamble Co
    15·1 answer
  • Lisa sells kitchen furniture through her website. While her sales are stable, she's concerned that they're not keeping pace with
    15·2 answers
  • What is the name of the food production strategy, which is characterized by "slash and burn, swidden agricultural techniques use
    11·1 answer
  • I’m<br> Sorry if this is hard to read but help me please it’s very important!!!!
    7·1 answer
  • Describes how consumers ______ purchase decisions and how they _____ and _________ of the purchased goods and services. It inclu
    15·1 answer
  • Mississippi River Shipyards is considering the replacement of an 8-year-old riveting machine with a new one that will increase e
    13·1 answer
  • At the beginning of January of the current year, Thomas Law Center's ledger reflected a normal balance of $55,000 for accounts r
    9·1 answer
  • Principle states that inventory costs are expensed as cost of goods sold when inventory is sold
    7·1 answer
  • What are the implications of using criteria, such as baldrige, in assessing organizational culture needs? explain
    15·1 answer
  • Who are the stakeholders who should be involved in the system and acquisition process?
    11·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!