Bought goods<br> for<br> cash $100<br> to double<br> entry system.

Show the changes to the t-accounts for the federal reserve and for commercial banks when the federal reserve buys $50 million in

mezya [45]

When the Federal Reserve buys $50 million in Treasury bills from commercial banks, itsassets increase by $50 million (it now owns $50 million in Treasury bills) but its liabili-ties also increase by $50 million as it credits the banks’ accounts at the Federal Reserve,part of the monetary base. From the perspective of commercial banks, their assets fall by$50 million because they sell Treasury bills to the Fed, but their assets also rise by $50million when their deposits at the Fed (reserves) are credited with $50 million.Initial changes to the T-account of the Federal Reserve immediately after the Fed pur-chase of $50 million in Treasury bills:Initial changes to the T-account of commercial banks immediately after the Fed pur-chase of $50 million in Treasury bills:After the Federal Reserve buys $50 million from commercial banks, the banks areholding $50 million in excess reserves. Since the banks do not want to hold any excessreserves, they will increase loans and deposits by $500 million, the maximum amountthat $50 million in reserves can support. Therefore, the money supply will alsoincrease by $500 million.Total changes to the T-account of commercial banks after the Fed purchase of$50 million in Treasury bills:13.Show the changes to the T-accounts for the Federal Reserve and for commercial bankswhen the Federal Reserve sells $30 million in U.S. Treasury bills. If the public holds afixed amount of currency (so that all new loans create an equal amount of checkablebank deposits in the banking system) and the minimum reserve ratio is 5%, by howmuch will checkable bank deposits in the commercial banks change? By how muchwill the money supply change? Show the final changes to the T-account for the com-mercial banks when the money supply changes by this amount.AssetsLiabilitiesTreasury bills−$50 millionCheckable deposits+$500 millionReserves+$50 millionLoans+$500 millionAssetsLiabilitiesTreasury bills−$50 millionNo changeReserves+$50 millionAssetsLiabilitiesTreasury bills+$50 millionMonetary base+$50 millionS-194MACROECONOMICS,CHAPTER 14ECONOMICS,CHAPTER 30S187-S198_Krug2e_Macro_PS_Ch14.qxp2/25/098:02 PMPage S-194

4 0

3 years ago

Trout Company is considering introducing a new line of pagers targeting the preteen population. Trout believes that if the pager

FinnZ [79.3K]

Answer:

Link is below

Explanation:

3 0

3 years ago

Read 2 more answers

What are the 3 Skills listed for a roofer?

Stels [109]

Answer: A

Explanation:

5 0

3 years ago

Read 2 more answers

PLEASE HELP!

vesna_86 [32]

I would say the third sentence. Proper planning and supervision is of utmost importance while catering to the client. I say this because the word diligence means, careful and persistent work or effort. This shows that the work is carefully planned. That's my opinion and not a fact so don't trust this unless my reasoning convinces you.

7 0

3 years ago

Milano Pizza Club owns three identical restaurants popular for their specialty pizzas. Each restaurant has a debt–equity ratio o

algol13

Answer:

A. $516,000

B. $696,600

Explanation:

A. Calculation to to determine the value of the Company's equity

First step is to calculate the Net income

Sales1,540,000

Less: Cost of goods sold790,000

Less: General and administrative costs525,000

Less: Interest expenses53,000

Income before corporate tax 172,000

Less: Corporate tax 40% 68,800

(40%*172,000)

Net income103,200

(172,000-68,800)

Now let determine the value of the Company's equity using this formula

Value of the Company's equity

= Net income/ cost of the firm’s levered equity

Let plug in the formula

Value of the Company's equity = $103,200/0.20

Value of the Company's equity = $516,000

Therefore The Value of the Company's equity is $516,000

B. Calculation to determine the total value of Company equity

First step is to calculate the Debt

Debt equity Ratio = 0.35

Debt/Equity = 0.35

Debt/ $516,000 = 0.35

Debt = $516,000 * 0.35

Debt =$180,600

Now let determine The Company’s value using this formula

Company’s Total value = Equity + Debt

Let plug in the formula

Company’s Total value = $516,000 + $180,600

Company’s Total value = $696,600

Therefore the total value of Company equity is $696,600

7 0

3 years ago

Bought goods for cash $100 to double entry system.