All categories

3 years ago

The desired reserve ratio is 10 percent of deposits, and the currency drain ratio is 1 percent of deposits.

Business

1 answer:

Flauer [41]3 years ago

4 0

Answer:

Quantity of money changes by $50,000,000

Explanation:

Desired reserve ratio = 10% = 0.1

Currency drain ratio = 1% = 0.01

Money multiplier = (1+0.1) / (0.1+0.01) = 1.1/ 0.11 = 10

Value of securities purchased = $5 million

Change in quantity of money :

$5 million * 10 = $50 million

Currency created : currency drain ratio * change in quantity of money

0.01 * $50,000,000 = $500,000

Amount of bank deposit = quantity change - currency created

= $50,000,000 - $500,000 = $4,500,000

You might be interested in

On October 1, Vista View Company rented warehouse space to a tenant for $3,600 per month. The tenant paid five months' rent in a

Damm [24]

Answer:

The adjusting entry needed on December 31 is:

Debit Unearned Rent revenue $10,800

Credit Rent Revenue $10,800

Explanation:

Following the Accrual accounting - an accounting method that revenue or expenses are recorded when a transaction occurs rather than when payment is received or made.

The tenant paid five months' rent in advance on October 1. From October 1 to December 31, Vista View Company had rented warehouse space to a tenant for 3 months.

The adjusting entry needed on December 31 is:

Debit Unearned Rent revenue $10,800 ($3,600 x 3 = $10,800)

Credit Rent Revenue $10,800

7 0

3 years ago

A customer called his registered representative to place a trade to buy 100 shares of ABC. The customer wants to put a limit on

DiKsa [7]

Answer:

unsolicited trade

Explanation:

In this scenario, the trade that was made would be considered an unsolicited trade. This is mainly due to the customer having called the representative telling him to place the trade and buy the 100 shares of ABC stock. Therefore, this trade was ultimately the idea of the investor (customer) in this scenario and not the representative's idea. That would make this trade fall into the category of an unsolicited trade. If the idea was initially the representative's and he was the one to mention the trade to the client then it would have been a solicited trade, but this is not the case.

7 0

3 years ago

Another name for a negotiated labor-management agreement is a?

statuscvo [17]

Another name for a negotiated labor-management agreement is a Collective bargaining agreement (CBA).

<h3>What is Collective bargaining agreement ?</h3>

Collective bargaining agreement can be regarded as the contract which encompass results of the negotiations that exist between the employer and the union.

Therefore, Another name for a negotiated labor-management agreement is a Collective bargaining agreement (CBA).

Learn more about agreement at

brainly.com/question/375033

#SPJ1

8 0

2 years ago

Andrew Industries purchased $165,000 of raw materials on account during the month of March. The beginning Raw Materials Inventor

maw [93]

Answer:

Journal entry for raw material used will be :

Dr. Work in process Inventory $141,000

Cr. Raw materials Inventory $141,000

Explanation:

The beginning Raw Materials Inventory balance = $22,000

The materials used to complete jobs during the month = $141,000 of direct materials and $13,000 of indirect materials

Journal entry for raw material used will be :

Dr. Work in process Inventory $141,000

Cr. Raw materials Inventory $141,000

The form of inventory is modified but the company's assets remain in the form of Work in Process. Assets are debited at all times.

5 0

3 years ago

Consider the following information pertaining to Pagoda's inventory: Product Quantity Cost Net Realizable Value Gloves 16 $ 121

aleksley [76]

Answer:

$3,028

Explanation:

As we know that

The inventory should be valued at cost or net realizable value which ever is lower

(A) (B) (A × B)

Product Quantity Lower value of cost or NRV Amount

Gloves 16 $121 $1,936

Shoes 26 $21 $546

Hats 13 $42 $546

Total amount $3,028

Hence, the inventory recorded amount is $3,028

4 0

3 years ago