ENGR.ECONOMIC ANALYSIS
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ISBN: 9780190931919
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Transcribed Image Text:Calculate the reserve requirement if the money multiplier is equal to 14 and banks hold no excess reserves and consumers
hold no cash. Round your answer to the nearest thousandth.
Sorry, that's incorrect. Try again?
RR
7
4
8
00
5
2
9
6
2
4
X
X
KI
y
X
0
2√
20
11
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- Suppose the Federal Reserve set the reserve requirement at 20%. Assume that banks lend all reserves that are not required to be held. Instructions: Round your answers to two decimal places. a. Complete the table below based on this information. Fractional Reserve Banking Transaction Sean receives $1,000 in cash and deposits the funds into his checking account. Sean's bank loans Maria all reserves that are not required to be held. Maria's bank loans Jackson all reserves that are not required to be held. Transaction Sean receives $1,000 in cash and deposits the funds into his checking account. Sean's bank loans Maria all reserves that are not required to be held. Deposit Maria's bank loans Jackson all reserves that are not required to be held. $1,000.00 Jackson's bank loans Paul all reserves that are not required to be held. Total Money Created by Transactions b. Suppose Instead that the reserve requirement is 15%. Complete the table using the new reserve requirement. Fractional Reserve…arrow_forwardSuppose the reserve requirement is set at 20 percent and excess reserves are $27 million. What is the money multiplier? Multiple Choice 0.05 5.40 5.00 135.00arrow_forwardUse the math you've just learned to calculate the money multiplier when the currency drain ratio is 0.1 and the desired reserve ratio is 0.01. The money multiplier is ___arrow_forward
- If the Federal reserve sets the required reserve ratio is set at something under 100%, banks can then influence the money supply. Explain why this the case.arrow_forwardAssume that the bank makes these loans. What will the new balance sheet look like? By how much has the money supply increased or decreased? If the money multiplier is 5, how much money will ultimately be created by this event?arrow_forwardIf you have the following data The monetary Items Value in M. Currency in circulation, 675 Demand deposits, 1500 Excess reserves, 100 required reserve, 0.1 Find the following: Money supply M1 The currency ratio, c The excess reserve ratio, er The money multiplier marrow_forward
- A commercial bank has actual reserves of $66,000 and checkable-deposit liabilities of $33,000, and the required reserve ratio is 5%. This bank can loan out $ at the moment. Vour AncIwer:arrow_forwardWhat is the value of the money multiplier when the required reserve ratio is: Instructions: Enter your responses rounded to two decimal places. (a) 16 percent? (b) 12 percent?arrow_forwardI need answer typing clear urjent no chatgpt i will give upvotearrow_forward
- Can i get you alls help with this one?arrow_forwardSuppose Robina Bank receives a deposit of $53,589 and the reserve requirement is 3%. Answer the questions using this information. Round your answers to two decimal places. What is the amount that Robina Bank must keep on hand as required by the Federal Reserve (Fed)? What is the amount that Robina Bank must have in excess reserves from this initial deposit? What is the total change in the M1 money supply from this one deposit? keep on hand: $ excess reserves: $ total change: $ Activate Windows 11:01 PMarrow_forwardCalculate the value of legal reserve ratio when the value of money multiplier is 10arrow_forward
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