ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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If the desired reserve ratio in a country is equal to 5% and the cash drain ratio is 30%, a deposit of $10,000 will create $36,356 of money.
1.True
2.False
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- if the required reserve ratio is 2 percent then the simple deposit multiplier is Enter a whole numberarrow_forwardWhich of the following is a function of money? a. a unit of account b. medium of exchange c. a store of value d. All of the above are correct.arrow_forwardWhich function of money is best served by bitcoin? A. A medium of exchange B. A unit of account C. A store of valuearrow_forward
- Currency held outside banks + demand deposits + travelers checks + other checkable deposits = Group of answer choices M3. M3 - M1. M2 - M1. M1.arrow_forwardThe value of M2 is $6400 and the value of M1 is $3300 Calculate the value of savings deposit with post office saving banksarrow_forwardCan you help me answer this questionarrow_forward
- M1 includes currency, checkable deposits, and traveler's checks, but M2 does not include M1 in any way. True Falsearrow_forwardIf M3 is $200 million and M1 is $88 million Find the value of net time deposit with banksarrow_forwardWith an initial depost of $1000 and a reserve requirement of 4%, what is the total amount of money creation possible? With an initial depost of $1200 and a reserve requirement of 5%, what is the total amount of money creation possible?arrow_forward
- 8-10 pleasearrow_forwardDoes the fact that your bank keeps only a fraction of your account balance in reserve worry you? Why don't people rush off to the bank and retrieve their money? What would happen if they did?arrow_forwardMoney/Banking/The Quantity of Money Theory (Chapter 14) 1.1 What are the four functions of money? Explain each in your own words. Can something be considered money if it does not fulfill all four functions? 1.2 Using the five criteria in the textbook, explain how U.S. currency is suitable to use as a medium of exchange. 1.3 Suppose that you decide that you no longer want to hold currency, and deposit all of your currency holdings to your checking account. What is the immediate or initial impact of this transaction on M1 and M2?arrow_forward
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