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3 years ago

If the reserve requirement is 20 percent, then excess reserves of $800 can increase M1 money supply by ___. g

Business

1 answer:

Llana [10]3 years ago

3 0

Answer:

If the reserve requirement is 20 percent, then excess reserves of $800 can increase M1 money supply by ___.

$3,200.

Explanation:

a) Data and Calculations:

Excess reserves = $800

Reserve requirement = 20%

Therefore, M1 money supply = $800/20% = $4,000

The increase in the M1 money supply will be $3,200 ($4,000 - $800)

b) The amount of funds that a bank is required by the central bank to hold in reserve to meet liabilities in case of sudden withdrawals by depositors is called the reserve requirement. It is usually stated as a percentage by the Fed Reserve. The Fed uses reserve requirement as a tool to increase or decrease money supply in the economy and influence interest rates. What the Fed does with the reserve requirement, therefore, depends on the monetary policy that it chooses to respond to the money market.

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3 years ago

Toby’s current marginal utility from consuming peanuts is 100 utils per ounce and his marginal utility from consuming cashews is

Ne4ueva [31]

Answer:

Toby is not maximizing his utility because MUp/Pp > MUc/Pc

Explanation:

given data

marginal utility consuming peanuts = 100 utils per ounce

marginal utility consuming cashews = 200 utils per ounce

peanuts cost = 10 cents per ounce

cashews cost = 25 cents per ounce

solution

we know that Toby will have maximize utility when here

Marginal utility of peanut ÷ price of peanut = Marginal utility of cashew ÷ cash ..........................1

MU (p) ÷ P (p) = MU (c) ÷ P (c)

put here value

$\frac{100}{10} = \frac{200}{25}$

but here

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3 years ago

Read 2 more answers

The Nelson Company has $1,312,500 in current assets and $525,000 in current liabilities. Its initial inventory level is $380,000

Sedbober [7]

Answer:

company can value of $190909.1

Explanation:

Given data:

current assets = $1,312,500

current liabilities = $525,000

initial inventory level is $380,000

current ratio = 2.2

current liabilities is calculated as $= \frac{Current/ Assets}{current/ ratio}$

plugging all value in above relation

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3 years ago

Investment banks are guilty of conflict of interest when they A) pressure their analysts to produce research favorable to their

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Answer:

The correct answer here is option D.

Explanation:

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3 years ago

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