A person deposits $1,000 in a bank account. If the required reserve ratio is 10%, what is the maximum amount by which the money supply can increase due to this transaction? Answer Choices: a. 9,000 b. 10,000 c. 11,000 d. 12,000
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- An economy has a reserve ratio equals to 12%. The society is holding 10% of the deposit in the form of cash. a) If the high-powered money (H) is RM100 billion, how much is the money supply in this economy? b) Say the Central Bank targets the money supply is RM650 billion. How much the high-powered money (H) in question a) above should change to achieve this target? *Prioritize question ba) Suppose that Tk.10,000 in new taka bills (never seen before) falls magically from the sky into your hands. What are the minimum increase and the maximum increase in the money supply that may result? Assume the required reserve ratio is 10 percent.b) Suppose you receive Tk. 10,000 from your grandmother and deposits the money in a saving account. your grandmother gave you the money by writing a check on her saving account. Would the maximum increase in the money supply still be what you found it to be in part a) where you received the money from the sky? Why or why not? c) Suppose that instead you getting Tk. 10,000 from the sky or a check through your grandmother, you get the money from your mother who had buried it in a can in her backyard. In this case, would the maximum ncrease in the money supply be what you found it to be in part a)? Why or why not?a) Suppose that Tk.10,000 in new taka bills (never seen before) falls magically from the sky into your hands. What are the minimum increase and the maximum increase in the money supply that may result? Assume the required reserve ratio is 10 percent.b) Suppose you receive Tk. 10,000 from your grandmother and deposits the money in a saving account. your grandmother gave you the money by writing a check on her saving account. Would the maximum increase in the money supply still be what you found it to be in part a) where you received the money from the sky? Why or why not?c) Suppose that instead you getting Tk. 10,000 from the sky or a check through your grandmother, you get the money from your mother who had buried it in a can in her backyard. In this case, would the maximum increase in the money supply be what you found it to be in part a)? Why or why not?
- The required reserve ratio is 10 percent, but banks actually keep 20 percent on reserve. The actual money multiplier will be a. 10. b. 9. c. 5. d. 2. e. 1.Suppose that National bank has $36 million in checkable deposits, Commonwealth bank has $45 million in checkable deposits and the required reserve ratio for checkable deposits is 10%. If the National bank has $4 million in reserves and Commonwealth has $5 million iin reserves, how much excess reserves does each bank have? Suppose that a customer of the National bank writies a check for $2 million to a real estate broker who deposits the check at Commonwealth bank. After the check clears, how much excess reserves does each bank have?2A. What is the net worth of the people’s bank? 2b.What is the required ratio? 2c.What are the people’s bank excess reserves? 2d. That arts the total loans of the people’s bank? 2e. Based on your answer in 2b computer money multiplier. 2f. Suppose a depositor comes to the bank and withdraw $2000 in cash. How much money supply will be reduced in the economy?
- A friend of yours produces 7,000 counterfeit one-dollar bills. Assume that the bills are undetectable with current technology and that the required reserve ratio is 20%. (a) What would be the maximum increase in the money supply? (b) Give two reasons as to why the actual increase in the money supply may be smaller than your answer to (a).Assume that a bank has on its asset side reserves of 1000 and loans of 6000 and on itsliability side deposits of 7000. Assume that the required reserve ratio is 10 percent.a. How much is the bank required to hold as reserves given its deposits of 7000?suppose the required reserve ratio is 5% for all bank . if an individual withdraws $10000 from bank ZIP , what will happen to the money supply in the country (show the multiplier effect) ? (a) the MS will increase by $ 20,000 (b) the MS will increase by $ 2,00,000 (c) the MS will deacrese by $ 2,00,000 (d) the MS will deacrese by $ 10,000
- suppose the required reserve ratio is 11%. How much additional money can BBB lend out at a maximum? suppose the required reserve ratio is lowered to 8%. What is the Maximum amount of additional money that BBB can lend out? Is this different than the maximum amount of new money BBB can create by itself? 3. suppose the required reserve ratio is raised to 15%. What is the maximum amount of additional money BBB can lend out?a) Suppose that Tk.10,000 in new taka bills (never seen before) falls magically from the sky into your hands. What are the minimum increase and the maximum increase in the money supply that may result? Assume the required reserve ratio is 10 percent. Explain in details.b) Suppose you receive Tk. 10,000 from your grandmother and deposits the money in a saving account. your grandmother gave you the money by writing a check on her saving account. Would the maximum increase in the money supply still be what you found it to be in part a) where you received the money from the sky? Why or why not? Explain in details. c) Suppose that instead you getting Tk. 10,000 from the sky or a check through your grandmother, you get the money from your mother who had buried it in a can in her backyard. In this case, would the maximum increase in the money supply be what you found it to be in part a)? Why or why not? Explain in details.An economy has a reserve ratio equals to 12%. The society is holding 10% of the deposit in the form of cash. If the high-powered money (H) is RM100 billion, how much is the money supply in this economy?