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
vivado [14]
2 years ago
7

Assume that banks hold no excess reserves and that all currency is deposited into the banking system. If the required reserve ra

tio is 5.00%, and the Federal Reserve wants to increase the money supply by $55.00 million, the Fed would need to make an open market purchase of $________ million. (Insert your answer in millions, and round to two decimal places.)
Business
1 answer:
GrogVix [38]2 years ago
3 0

Answer:

2.75 million

Explanation:

Required reserves is the percentage of deposits required of banks to keep as reserves by the central bank

Required reserves = reserve requirement x deposits

Increase in value of money supply as a result of the purchase is determined by the money multiplier

Money multiplier = 1 / reserve requirement

1/0.05 = 20

increase in money supply = amount of open market purchase / reserve requirement

55  / 20 = 2.75 million

You might be interested in
The City of Bamberg, which has a fiscal year end of December 31, issued a nine month $1,000,000 bond anticipation note on July 1
evablogger [386]

Answer:

$1,000,000

Explanation:

The computation of the Capital Projects Fund liability for the note is shown below:

= Issued price

= $1,000,000

The time period should be ignored. As the question has asked about the Capital Projects Fund liability , so we consider only the amount i.e  $1,000,000 without considering its time period, and the dates which are mentioned in the question.

5 0
3 years ago
Morris' company decided in the beginning of 2017 that they need to make $6,000,000 worth of improvements starting january 1, 202
Ne4ueva [31]
<span>In order to determine the amount of the deposits, you must divide the overall amount needed by the future value of annuity due of 1 at 10% for 4 periods.  $6,000,000 / 5.11 = $1,174,168.</span>
7 0
3 years ago
Today, sandra will present a report to her class on the top ten income-producing countries in the world. most of the countries t
Radda [10]

<span>The world’s richest countries are mostly found in Europe. Therefore Sandra will be presenting most of the countries located in <u>“Europe”</u>.</span>

<span>One possible factor why Europe is so rich is because of the numerous wars it encountered.  Aside from the wealth obtained in the conquest, wars also lead to advancement in technology. </span>

3 0
2 years ago
what might be the outcome of raising the fees and requiring more paper work in order to start a corperation? what would happen i
Pie
The outcome of raising fees and requiring more paper work to start a corporation would be that there would be less corporations and, the opposite would happen if fees were lowered and application possesses were simpler, hope this helps
8 0
3 years ago
How do you create a business
anyanavicka [17]

Answer:

with the state

Explanation:

5 0
3 years ago
Read 2 more answers
Other questions:
  • Northern Company has bonds with an amortized cost of $600,000. At the end of the first reporting period, the bonds had a fair va
    12·1 answer
  • Inflation is 20 percent. Debt is $2 trillion. The nominal deficit is $300 billion. If the expected inflation rate falls from 20
    12·1 answer
  • Prepare an income statement for May assuming the following data are not included above: (1) $900 worth of services were performe
    12·1 answer
  • Which ics function is responsible for documentation for mutual aid agreements?
    14·2 answers
  • To encourage potential buyers to take its new Model 3 sedan for a test drive, BMW posts a video on its website of the Model 3 sp
    13·1 answer
  • bank examiners are _____. a) authorized to force banks to sell off investments that they consider excessively risky. b) only per
    8·1 answer
  • One of the reasons Omega Distributors, a local manufacturing company, is considered a good place to work is that the managers en
    6·1 answer
  • On which of the following goods or services might a tax increase be hardest to pass on to consumers? A) automatic car washes
    9·2 answers
  • Criteria for recruitment of business administration department
    8·1 answer
  • Rusty Corporation purchased a rust-inhibiting machine by paying $54,500 cash on the purchase date and agreed to pay $10,900 ever
    8·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!