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VladimirAG [237]
2 years ago
6

Explain why a single commercial bank can safely lend only an amount equal to its excess reserves but the commercial banking syst

em can lend by a multiple of its excess reserves. What is the monetary multiplier, and how does it relate to the reserve ratio?
Business
1 answer:
Savatey [412]2 years ago
4 0

Answer:

A single commercial bank cannot lend more than its reserves because if checks are written for a higher amount than those reserves, the commercial bank will lose its reserves.

On the other hand, in a fractional reserve system, the system as a whole cannot lose reserves because they are backed up by other banks.

Finally, the relationship between the monetary multiplier and the reserve ratio is inversely proportional. If the reserve ratio goes up, the money multiplier will go down because banks will have less money available to loan, and therefore, will create a lesser amount of money.

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How can a developing country generate internal funds?
Brrunno [24]

Answer:

The correct answer would be option C, By producing more than it consumes.

Explanation:

A developing country can generate internal funds by producing more than it consumes.

Internal funds are the funds that are generated internally, either at the individual level or at the country level. When a country generates funds on its own, the funds are called as the internal funds.

So internal funds can be generated by producing more than the consumption requirements. In this way the economic activities will increase, the money supply would be better and the country would be able to generate funds it need.

5 0
3 years ago
Hannah runs a hospitality business with Ray and Susan, backed by a group of investors who provide the funding but rely on Hannah
12345 [234]

Answer:

A trust

Explanation:

A trust is a kind of business that acts as a fiduciary or a trustee of property on behalf of another party.

Typical functions of a trust includes administration and management of the business.

The assets are eventually meant to be transferred to another person.

In the given scenario Hannah is running a hospitality business which she recieve backing from investors.

The investors have entrusted Hannah with the running of the business. So this is a trust

3 0
3 years ago
Which of the following is useful for making rational choices?
ehidna [41]

Answer:

financial planning

Explanation:

It is best to be prepared. most things we want to do cost money. It is very easy to loose track of spending money.

8 0
3 years ago
Read 2 more answers
All of the following are assumptions of the perfectly competitive model except: Select an answer and submit. For keyboard naviga
soldier1979 [14.2K]

Answer:

d

Explanation:

A perfect competition is characterized by many buyers and sellers of homogenous goods and services. Market prices are set by the forces of demand and supply. There are no barriers to entry or exit of firms into the industry.  

In the long run, firms earn zero economic profit.  If in the short run firms are earning economic profit, in the long run firms would enter into the industry. This would drive economic profit to zero.  

Also, if in the short run, firms are earning economic loss, in the long run, firms would exit the industry until economic profit falls to zero.  

Perfectly competitive market consists of a large number of firms, and each firm is small relative to the entire market. This makes firms unable to set the prices for their goods.

It is the monopoly and oligopoly market structure that is characterised by high entry and exit into the market

5 0
3 years ago
Your friend has $80 when he goes to the fair. He spends $4 to enter the fair and $12 on food. Rides at the fair cost $1.25 per r
padilas [110]

Answer:

f(x) = -1.25x + 64 I hope this helps :)

Explanation:

total amount of money: $80

He spent $16 for the entrance of the fair and food.

80-(4+12) = 64

After that you subtract $1.25 per ride = -1.25x

Then it gives the function:

f(x) = -1.25x + 64

6 0
3 years ago
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