Answer: A. stay outta debt
Answer:
The amount of money created will be $1,250,000
Explanation:
In order to find the maximum amount of money that will be created in the banking system as a result of a deposit, we need to find the money multiplier.
Multiplier = 1/reserve ration = 1/0.2 = 5
The amount of money created = Multiplier *Initial deposit
Amount of money created = 5* 250,000
= 1,250,000
A drop in interest will result in lower payments because of its overall discretion value
Answer:
a. 45%
Explanation:
The sum of total probabilities is always equal to 1. Since in the given question only three probabilities are given, so the sum of these three probabilities shall be 1 which is represented as follows by the equation:
probability of boom+probability of normal+probability of recession=1
In the given question:
probability of boom=30%
probability of recession=25%
30%+probability of normal+25%=1
Probability of normal=1-25%-30%=45%
So based on the above calculations, the answer shall be a. 45%
