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Maslowich
3 years ago
10

A bank's actual reserve ratio is the percentage of total deposits a bank actually holds on to. It is made up of the percentage t

hey are required to hold on to, known as the required reserve ratio, plus any extra they choose to hold on to. Suppose Dave's bank has an actual reserve ratio of 12%, and his bank makes a loan to Darlene based on the funds from Dave's deposit. How much does the money supply increase as a result of this second step
Business
1 answer:
Vsevolod [243]3 years ago
5 0

Answer:

The increase in the money supply will be "833333.33".

Explanation:

  • The real reserve ratio of either a lender seems to be the proportion of overall reserves another bank currently occupies onto another.
  • It consists of the proportion they become required to secure forward with, referred to that as the reserve requirement expected, including whatever extra those who happen to retain onto this.

According to the question,

The multiplier will be:

⇒ \frac{1}{RRR}

⇒ \frac{100}{12}

⇒ \frac{25}{3}

So the increase will be:

⇒ 100000\times \frac{25}{3}

⇒ 833333.33

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On January 2, Novation Corp. replaced its boiler with a more efficient one. The following information was available on that date
grandymaker [24]

Answer:

$136,000

Explanation:

Purchase price of new boiler = $120,000

Carrying amount of old boiler = $10,000

Fair value of old boiler = $4,000

Installation cost of new boiler = $16,000

The selling cost of old boiler = $4,000

Now,

Capitalized cost of the new boiler

= Purchase price of the new boiler + Installation cost the new boiler

= $120,000 + $16,000

= $136,000

3 0
3 years ago
You are told that standing up during the Cowboys football game will give you a better view of the field. However, if everyone st
Mars2501 [29]

Answer:

I think the answer is e. Because you the variable that if everyone stands up you cant see is omitted.

6 0
3 years ago
Rayburn owns all the shares of Newcastle Corporation, which operates as an S corporation. Rayburn's basis in the stock is $15,00
maksim [4K]

Answer:

$7,000 $-0-

Explanation:

For Rayburn to know what to record from the cash distribution, he will need to subtract his basis in the stock from the cash distribution he receives

Therefore $22 000 - $15 000 = $7 000.

And Newcastle has no income =$-0-

7 0
3 years ago
A company uses the cost method of accounting for treasury stock. On January 1, the company repurchases 1,000 shares of stock at
Ksivusya [100]

Answer:

The credit on December 31 is to credit Treasury Stock with $15,000.

Explanation:

There are two methods for accounting for Treasury Stock.  The first is the par value method.  With this method, the Treasury Stock account is debited or credited with the par value for each transaction, while the difference in par value is taken to the Additional Paid-in Capital account.

Using the cost method, the Treasury Stock account is debited and credited with the value of each transaction and the Additional Paid-in Capital account is not affected.

This implies that under the cost method, the purchase and resale of treasury stock is recorded by debiting and crediting the treasury stock account by the actual cost of purchase and actual value of sale.

3 0
3 years ago
Suppose the price level reflects the number of dollars needed to buy a basket of goods containing one cup of tea, one biscuit, a
dimulka [17.4K]

Answer:

11.11%

8 Baskets and in year 2, 9 Baskets, the value of money will increases

Increases

Explanation:

The computation of the given question is shown below:-

Decrease at an Annual Rate = price of the same basket ÷ the basket costs - one year

= $8 ÷$ 9 - 1

= 0.1111

= 11.11%

In year one, $72.00 will buy  8 Baskets and in year 2, 9 Baskets, the value of money will increases.

The value of money is increasing.

6 0
3 years ago
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