Answer:
B. False
Explanation:
The banking system can expand the supply of money by a maximum of $1,000,000 ($200,000/0.2).
The maximum currency creation by the banking system is a function of the checkable deposits and the reserve ratio. The formula for this is called the money multiplier, and is given as the checkable deposits divided by the reserve ratio. With this multiplier factor, banks can increase the currency in circulation. This is why central banks use the reserve ratio to monitor the supply of money in their economies.
Answer:
MC = $17
P = $25.5
Explanation:
We proceed as follows;
Firstly calculate MC when e = -2, where MR = MC
(P-MC) / P = 1 / IeI
Here P = $34 and e = -2
(34 - MC) / 34= 1/ I-2I
(34 - MC) / 34= 1 / 2
78-2MC = 34
2MC = 34
MC = 34/2
MC = 17
Now, as we have MC, we will calculate the new price when e = -3
(P-MC) / P = 1 / IeI
(P - 17) / P = 1 / I-3I
(P - 17) / P = 1 / 3
3P -51 = P
2P = 51
P = 51/2
P = 25.5
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Answer:
the present value is $88,087.08
Explanation:
The computation of the present value is shown below:
As we know that
Future value = Present value × (1 + rate of interest)^number of years
$203,000 = Present value × (1 + 0.11)^8
So, the present value is $88,087.08
hence, the present value is $88,087.08
