ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
Bartleby Related Questions Icon

Related questions

Question

URGENT!!!!! please help me! thank you so much!! :)

Suppose Hong Kong's money supply data as at 31 Dec 2016 and 31 Dec 2017 were as follows:
31 Dec 2017
($ billion)
107
30
Total legal tender issued
Legal tender held by all deposit-taking institutions
Demand deposits
Deposits with licensed banks
Negotiable certificates of deposit (NCDs) issued by licensed banks
and held by the public
Deposits with restricted licence banks (RLBS) and deposit-taking
companies (DTCs)
NCDs issued by RLBS and DTCs
NCDs issued by RLBS and DTCS and held by the public
31 Dec 2016
($ billion)
100
25
200
600
150
180-19
120
40
201
606
151
P182
120
42
ad elds
teha. Calculate the changes in the monetary base and the money supply M1 from 31 Dec 2016 to
31 Dec 2017, respectively.
b. On a certain day, some customers withdrew $30 billion from their savings deposits. They
used $10 billion to buy NCDs from restricted licence banks, deposited $15 billion into their
time deposit accounts with licensed banks and held the remaining $5 billion in cash. How
did the above transactions affect money supply M1, M2 and M3, respectively?
expand button
Transcribed Image Text:Suppose Hong Kong's money supply data as at 31 Dec 2016 and 31 Dec 2017 were as follows: 31 Dec 2017 ($ billion) 107 30 Total legal tender issued Legal tender held by all deposit-taking institutions Demand deposits Deposits with licensed banks Negotiable certificates of deposit (NCDs) issued by licensed banks and held by the public Deposits with restricted licence banks (RLBS) and deposit-taking companies (DTCs) NCDs issued by RLBS and DTCs NCDs issued by RLBS and DTCS and held by the public 31 Dec 2016 ($ billion) 100 25 200 600 150 180-19 120 40 201 606 151 P182 120 42 ad elds teha. Calculate the changes in the monetary base and the money supply M1 from 31 Dec 2016 to 31 Dec 2017, respectively. b. On a certain day, some customers withdrew $30 billion from their savings deposits. They used $10 billion to buy NCDs from restricted licence banks, deposited $15 billion into their time deposit accounts with licensed banks and held the remaining $5 billion in cash. How did the above transactions affect money supply M1, M2 and M3, respectively?
The table below shows a banking system's balance sheet. Suppose there are excess reserves
of $24 billion and the public never holds any cash.
Assets ($ billion)
Reserves
Loans
40
40
Liabilities ($ billion)
Deposits
80
a. Find the actual banking multiplier and the maximum banking multiplier.
b.
If banks decide not to keep any excess reserves, what are the maximum possible increases in
deposits and loans?
C.
Suppose due to insufficient demand for loans, banks have only made $60 billion in new loans
to the public. What is the maximum increase in deposits? Also, calculate the amount of excess
reserves.
expand button
Transcribed Image Text:The table below shows a banking system's balance sheet. Suppose there are excess reserves of $24 billion and the public never holds any cash. Assets ($ billion) Reserves Loans 40 40 Liabilities ($ billion) Deposits 80 a. Find the actual banking multiplier and the maximum banking multiplier. b. If banks decide not to keep any excess reserves, what are the maximum possible increases in deposits and loans? C. Suppose due to insufficient demand for loans, banks have only made $60 billion in new loans to the public. What is the maximum increase in deposits? Also, calculate the amount of excess reserves.
Expert Solution
Check Mark
Knowledge Booster
Background pattern image
Economics
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.
Similar questions
Recommended textbooks for you
Text book image
ENGR.ECONOMIC ANALYSIS
Economics
ISBN:9780190931919
Author:NEWNAN
Publisher:Oxford University Press
Text book image
Principles of Economics (12th Edition)
Economics
ISBN:9780134078779
Author:Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:PEARSON
Text book image
Engineering Economy (17th Edition)
Economics
ISBN:9780134870069
Author:William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:PEARSON
Text book image
Principles of Economics (MindTap Course List)
Economics
ISBN:9781305585126
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Text book image
Managerial Economics: A Problem Solving Approach
Economics
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Cengage Learning
Text book image
Managerial Economics & Business Strategy (Mcgraw-...
Economics
ISBN:9781259290619
Author:Michael Baye, Jeff Prince
Publisher:McGraw-Hill Education