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lina2011 [118]
3 years ago
15

Bank reserves are $200, the public holds $1000 in currency, and the reserve-deposit ratio is 20%. What is the Value of Bank Depo

sits? What is the Money Supply? Suppose that the Fed sells $50 worth of bonds in an "open market sale." Assuming that the public does not wish to change the amount of currency it holds, what is the new money supply after this open market purchase? Please enter your answers as numerical responses (ie. 100 or $100 not "One Hundred Dollars")
Business
1 answer:
Alja [10]3 years ago
6 0

Answer:

What is the Value of Bank Deposits?

bank deposits = bank reserves / required reserve ratio = $200 / 20% = $1,000

What is the Money Supply?

money supply = bank deposits + currency held by the public = $1,000 + $1,00 = $2,000

Suppose that the Fed sells $50 worth of bonds in an "open market sale." Assuming that the public does not wish to change the amount of currency it holds, what is the new money supply after this open market purchase?

if the FED sells $50 worth of bonds, money supply will decrease by $50 x (1 / 20%) = $50 x 5 = $250

total money supply = $2,000 - $250 = $1,750

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1 year ago
You are considering the purchase of an office building for $1.5 million today. Your expectations include the following: first-ye
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Answer:

$289000

Explanation:

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Therefore, (V&C) allowance = [$340,000 15%]

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Calculate Effective Gross Income (EGI) for the first year of operations:

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Potential gross income (PGI)

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Effective Gross Income ( EGI )

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3 years ago
An investor bought a one-acre lot on the outskirts of a city for $12,700 cash. Each year she paid $175 of property taxes. At the
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Answer:

79.5%.

Explanation:

Rate of return = \frac{final value - initial value}{initial value} x 100

The cost of the acre = $12700.

Total property taxes paid for 7 years = $175 x 7

                                                             = $1225

Net value of cost = $12700 + $1225

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The rate of return of the acre of land is 79.5%.

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2 years ago
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