EconomicsExercice 2FiduciaryDemandTermUnits ofNegotiableDepositsrefundablecurrencydepositsdepositsmoneydebtwith awith < 3marketsecuritiesduration ofmonths'fundswith an< 2 yearsnoticeinitialmaturity <=2 yearsSeptember1330.88621.31080.22427.9618.60.320201) Define the monetary aggregates M1 and M2? Calculate the value of these two aggregates inSeptember 2020?Bank B has 10,000€ of excess reserves and decides to grant loans until these reserves are exhausted inorder to reserves until they are exhausted, in order to develop its activity. Knowing that the that the ECBimposes a reserve requirement of 5%, that bank A has a market share of 15% of bank deposits of bankdeposits of 15% and that banknotes represent 10% of the money supply (in the sense of M1),2) Calculate the total amount of credits granted by B and the amounts of the differentleakage it must face.

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Exercice 2 Fiduciary Demand Units of Deposits refundable Term Negotiable deposits deposits with a currency debt money market with < 3 securities duration of months' funds with an < 2 years notice initial maturity <= 2 years September 1330.8 8621.3 1080.2 2427.9 618.6 0.3 2020 1) Define the monetary aggregates M1 and M2? Calculate the value of these two aggregates in September 2020?

Exercice 2 Fiduciary Demand Units of Deposits refundable Term Negotiable deposits deposits with a currency debt money market with < 3 securities duration of months' funds with an < 2 years notice initial maturity <= 2 years September 1330.8 8621.3 1080.2 2427.9 618.6 0.3 2020 1) Define the monetary aggregates M1 and M2? Calculate the value of these two aggregates in September 2020?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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n the table below, the money supply, defined by M3, is equal to ........ Currency held by the non-bank public ($ billion) Current deposits at banks ($, billion) Other deposits at banks and other deposits held by other deposit -taking institutions ($, billion) 60 240 1500 Select one: a. 1200 billion b. 1800 billion c. 1500 billion d. 1740 billion
14. Suppose the actual overnight interest rate is 5%. If the central bank lowers its target overnight rate to 4.5%, the money supply will eventually decrease as a result of an increase in excess reserves in the banking system. decrease as a result of open-market operations. increase as a result of open-market operations. decrease as a result of a decrease in the demand for new loans. increase as a result of an increase in excess reserves in the banking system.
1) What do you understand by the terms indemnity and guarantee. How can a continuing guarantee be revoked?
Discuss how the money supply is increased through the process of the Fed purchasing bonds in the open market. What is the signficance of doing so?
The money multiplier declined significantly during the period 1930-1933 and also during the recent financial crisis of 2008-2010. Yet the M1 money supply decreased by 25% in the Depression period but increased by more than 20% during the recent financial crisis. What explains the difference in outcomes? A. The excess reserves ratio increased rapidly during the recent financial crisis. B. There was a minimal increase in the currency ratio during the recent financial crisis. C. There was a significant increase in the monetary base during the recent financial crisis. OD. The overall level of deposit expansion decreased during the recent financial crisis.
Real-Time Data Analysis Exercise* *Real-time data provided by Federal Reserve Economic Data (FRED), Federal Reserve Bank of Saint Louis. The table shows the quantities of M1, M2, and their components in August 2022 but with two values missing and shown in the table as 0.0. What are the missing values? >>> Answer to the nearest 1 decimal place. Other liquid deposits are $ Demand deposits are $ billion. billion. C Measures and Components of Money in August 2022 M2 Money market funds Small time deposits M1 Demand deposits Other liquid deposits Currency Amount August 2022 (billions f dollars) 21,711.4 1,096.3 162.2 20,452.9 0.0 0.0 2,178.5
Assume that increasing price levels cause the above shift in money demand. If the central bank desired to keep levels of investment consistent with those prior to the shift of MD, what would be their optimal solution using open market operations? a. Decrease the discount rate b. Increase the federal budget deficit c. Enforce tariffs on imported resources d. Increase money supply by purchasing securities e. Sell securities in order to increase borrowing activity
The Bangladesh Bank has created additional money worth Tk70,794 crore through various refinance schemes and easing regulatory requirements after the Covid-19 outbreak in March for stimulating demand to revive the declining economy. (link: https://tbsnews.net/economy/banking/bangladesh-bank-creates-money-worth-over-tk70000cr-revive-economy-76435?fbclid=IwAR108OXKcbXq6JjZj6v9FbULrDtys_QsZySUTKeAmauoqTjppgnLqU89muw#.Xq5kdXhgRqq.facebook). Creating additional money will increase money supply. What will happen to price level? Which theory did you use to answer the question? Explain the theory
8. The money multiplier declined significantly during the period 1930–1933 and alsoduring the recent financial crisis of 2008–2010. Yet the M1 money supply decreasedby 25% in the Depression period but increased by more than 20% during the recentfinancial crisis. What explains the difference in outcomes?
The Bangladesh Bank has created additional money worth Tk70,794 crore through various refinance schemes and easing regulatory requirements after the Covid-19 outbreak in March for stimulating demand to revive the declining economy. (link: https://tbsnews.net/economy/banking/bangladesh-bank-creates-money-worth-over-tk70000cr-revive-economy-76435?fbclid=IwAR108OXKcbXq6JjZj6v9FbULrDtys_QsZySUTKeAmauoqTjppgnLqU89muw#.Xq5kdXhgRqq.facebook). Do you think creating this additional money will lead to inflation? What type of inflation, demand-induced or supply-induced? Do you think it will be continued inflation? Why? Draw a relevant diagram to explain your answer.