Answer:
The bank will be able to lend:
$42,105,263 ($8 million/ 0.19)
Explanation:
The above amount which the bank can lend from the $8 million received from the Federal Reserve for a customer is a function of $8 million deposit in a customer's account and the reserve ratio. This is called the money multiplier.
The money multiplier is the amount of money that banks generate with each dollar of reserves. Reserves is the amount of deposits that the Federal Reserve requires banks to hold and not lend. The level of Reserves and deposit liabilities determine the amount a bank can lend out.
The process by which banks create more money than the physical money is called money creation. This shows that a bank creates more money in the economy through its lending activities.
If the legal reserve ratio falls from 25 percent to 10 percent, excess reserves of this single bank will rise by $6,000 and the monetary multiplier will increase from 4 to 10. The correct answer is D.
Answer:
The correct answer is 3,175,300.
Explanation:
According to the scenario, the computation of the given data are as follows:
We can calculate the number of shares by using following formula:
Number of shares = [ Outstanding + ( Additional share × Months) + ( Additional share × Months)] × 1+Dividend
By putting the value, we get
= [2,600,000 + (280,000 × 6/12) + (280,000 × 3/12)] × 1.13
= [ 2,600,000 + 140,000 + 70,000 ] × 1.13
= 3,175,300
The information given regarding the marginal revenue is illustrated below.
<h3>How to illustrate the information?</h3>
Marginal revenue is the increase in revenue that results from the sale of one additional unit of output.
While marginal revenue can remain constant over a certain level of output, it follows from the law of diminishing returns and will slow down when the output level increases.
Here, the price effect dominates the quantity effect so he cannot increase the production from 7 units to 8 units.
Learn more about marginal revenue on:
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