A country has $35 worth of factories with foreign owners. The country's nationals own $100 of wealth, of which only 52 is invested domestically. The country's treasury is holding $8 of reserves of foreign currency. Foreigners own $15 of the country's firms' stock. Foreigners hold no deposits nor other in the country. They have zero reserves of the country's currency. (a) Find the coun

A country has $35 worth of factories with foreign owners. The country's nationals own $100 of wealth, of which only 52 is invested domestically. The country's treasury is holding $8 of reserves of foreign currency. Foreigners own $15 of the country's firms' stock. Foreigners hold no deposits nor other in the country. They have zero reserves of the country's currency. (a) Find the coun

Economics:

10th Edition

ISBN:9781285859460

Author:BOYES, William

Publisher:BOYES, William

Chapter12: Money And Banking

Section: Chapter Questions

Problem 10E

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NIIP and national wealth A country has $35 worth of factories with foreign owners. The country's nationals own $100 of wealth, of which only 52 is invested domestically. The country's treasury is holding $8 of reserves of foreign currency. Foreigners own $15 of the country's firms' stock. Foreigners hold no deposits nor other in the country. They have zero reserves of the country's currency. (a) Find the country's NIIP (b) The rate of return on all domestic investment abroad except the currency reserves is 5%. The reserves pay 0. For foreigners, the return on all their assets in the country is 2%. Find the country's NFIA. (c) By the end of the year (January 1 next year), the country has $48 worth of claims on foreign assets (including the $8 in the treasury) and foreigners have $55 of claims on the country's assets. There were no valuation effects. Find the country's current account. (d) In (c), nothing changes for the home claims on foreigners. The foreign FDI…
9. Commercial banks:a) implement monetary policy.b) are nonprofit organizations that lend and borrow funds.c) are financial intermediaries that lend funds and accept deposits.d) all of the above. 11. First national bank has assets of $900,000 and liabilities of $600,000. First NationalTrust’s owner’s equity is:a) $0.b) $300,000.c) $600,000.d) $900,000.12. A bank has reserves of $40, loans of $110, deposits of $90, and owners’ equity of$60. Which of the following represents the bank’s total assets?a) $180b) $110c) $130d) $150Table 14.1: FIRST COMMERCIAL BANKAsset Liabilities___________________$150,000 Total Reserves: $1,000,000 Deposits$100,000 Required Reserves $200,000 Net Worth? Excess Reserves? Loans$1,200,000 Total $1,200,000 Total________13. Refer to Table 13. 1. First Commercial bank’s excess reserves equal $__________.a) 150,000b) 250,000c) 100,000d) 50,00014. Refer to Table 13.1. First Commercial Bank’s total loans equal $______________.a) 1,050,000b) 1,200,000c) 1,150,000d)…
The federal deposit insurance corporation(FDIC) does which 3 things? a. Directly manges every bank in the unitwd states b. Performs tests on banks to see if they are prepared for emergencies c. Takes over failing banks and sells them to better managed banks d. uses tax payer money to help out struggling banks e. Insures deposits in every bank account up to $250,000
Calculate Total Potential Deposit Creation given the following information. rrr = .09 Total Deposits: $6300 Total Reserves: $4200
A $500 deposit into a checking account increases checkable deposits by $500, and increases the bank's ________ by $500. A) loans B) reserves C) capital D) securities
Transaction One: Open a Bank and Accept Deposits Name your Bank Draw a T-Account Representing Deposits of $2 million Transaction Two: Grant a Loan The Reserve Requirement is 20% Customer A wants to borrow $1 million. Customer B wants to borrow $400,000. Customer C wants to borrow $300,000. Can you fulfill all three loan requests? Draw a T-Account Representing a bank that is fully “loaned up” (reduce the loan amount to Customer C if necessary) Transaction Three: Follow the Money Creation Process Customer A deposits his loan with his home bank, Bank of Taylor Draw a T-Account Representing this transaction for Bank of Taylor assuming they already have $1.5 million in deposits and loans in the amount of $700,000 Transaction Four: Calculate the Money Creation Effect What is the money multiplier rate in this example? If banks in this economy are always fully loaned up, calculate how much money was created in this economy from the original three loans made by your bank…
Stealth bank has deposits of $300 million. It holds reserves of $20 million and has purchased government bonds worth $300 million. The bank's loans, if sold at current market value, would be worth $600 million. What does Stealth bank’s net worth equal? a. $1.22 billion b. $920 million c. $620 million d. $20 million
Asma has a credit card account with Bank Muscat. The bank is considering whether to raise Asma’s credit card interest rate. Asma can respond by moving to National bank of Oman (NBO) or do nothing. If Bank Muscat raises Asma’s interest rate and Asma does nothing, then Bank Muscat increases profit by 300 OMR while Asma receives -300 OMR. If Bank Muscat raises Asma’s interest rate and Asma transfers her account to NBO then Bank Muscat receives -150 and Asma receives 100 OMR. If Bank Muscat does nothing and Asma does nothing, then both gets 0 OMR. If Bank Muscat does nothing and Asma transfer her account to NBO then Bank Muscat receives -150 while Asma receives -75 OMR. Draw the game with the help of a tree chart. If you are a bank manager of the Bank Muscat, then what is the best strategy for you. What is the best strategy if you are helping Asma with her decision?
If a local bank decides to convert some of its U.S. Treasury securities into cash, which it will hold in its vault, reserves will ________, liabilities will ________, and owner’s equity will ________.
_________ and __________ allow a financial intermediary to offer safe, liquid liabilities such as deposits while investing the depositors’ money in riskier, illiquid assets. a. Diversification; high equity returns. b. Price risk; collateral. c. Primary markets; foreign exchange markets. d. Monitoring; diversification
14. . A bank has reserves of $40, loans of $110, deposits of $90, and owners’ equity of $60. Which of the following represents the bank’s total assets? $180 $110 $130 $150
Money laundering has become a pertinent threatening the stability of various regions by actively supporting and strengthening terrorist activities and criminal organizations ". How KYC & AML guidelines form by RBI helps in curbing money Laundering practices?