39. Which of the following are ways in which banks can help businesses in the United States? Choose all thatapply.Banks can reduce the money supply through the use of the money multiplier.Banks can serve as a stopgap to save struggling businesses from bankruptcy with small loans.Bank loans remove personal liability from company owners.O Bank loans are tax-deductible for businesses.

Banks are the financial institutions which grant loans and keep the customers money as deposits. The…

apply. O Banks can reduce the money supply through the use of the money multiplier. O Banks can serve as a stopgap to save struggling businesses from bankruptcy with small loans. O Bank loans remove personal liability from company owners. Bank loans are tax-deductible for businesses.

apply. O Banks can reduce the money supply through the use of the money multiplier. O Banks can serve as a stopgap to save struggling businesses from bankruptcy with small loans. O Bank loans remove personal liability from company owners. Bank loans are tax-deductible for businesses.

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter21: The Monetary System

Section: Chapter Questions

Problem 2CQQ

See similar textbooks

Related questions

Q: QUESTION 3 The Federal Funds Market is actually monitored and manipulated by the Federal Reserve,…

A: 3) Individual investors are unable to invest in the federal funds market. It includes commercial…

Q: b. Calculate the new money supply (Enter response here.) c. Calculate the money multiplier. (Enter…

Q: The velocity of money is defined as A. the ratio of nominal GDP and nominal money supply B. the…

A: Quantity theory of money states the relationship between money supply, velocity, price level and…

Q: a. What is the demand for central bank money? b. Find the equilibrium interest rate by setting the…

A: “Since you have posted a question with multiple sub-parts, we will solve first three subparts for…

Q: b. Calculate the new money supply. (Enter response here.) c. Calculate the money multiplier. (Enter…

A: We use the following formulas to answer the question. Total money supply = Currency in circulation +…

Q: One part of monetizing the debt is for th central bank to A.conduct an open market purchase…

A: Central bank in influence the money supply in the economy by using open market operations.

Q: Suppose that money demand is given by Md = $Y(0.45 – 0.4i) where SY is $90. Answer the Following…

A: the money supply refers to the total volume of money held by the public at a particular point in…

Q: Assuming that banks choose to maintain a liquidity ratio of 20 per cent and assuming that new cash…

A: A cash number is during all|one amongst|one in every of} many closely connected ratios of economic…

Q: MD, MD, QUANTITY OF MONEY Refer to Figure 34-4. Suppose the money-demand curve is currently MD 2. If…

A: Meaning of Money Supply: The term money supply refers to the situation under which the overall…

Q: Money held to take advantage of future financial opportunities is the O Portfolio demand for money.…

A: There are following three motives that direct people to hold money: Transaction demand for money: It…

Q: Explanation it correctly Q)Assume that some people who receive bank loans do not deposit the full…

A: The highest amount of money a bank may generate for each unit of money it has in reserves is known…

Q: 1. Debit cards allow an individual to transfer funds directly in a checkable account to a merchant…

A: Hi there! As per the honor code, we have the authority to solve only one question at a time.Money is…

Q: (M/P)d = 1,000 − 100r, M = 1000 P = 2. a) Graph the supply and demand for real money balances. b)…

A: In the study of macroeconomics, The LM curve can be defined as the liquidity preference and money…

Q: The asset demand for money 'Da' is shown in the graph below. The transactions demand for money is…

Q: QUESTION Consider the model of money demand we saw in class. Let the elasticity of money demand with…

A: Elasticity of money demand refers to the rate of change of money demand with respect to income or…

Q: The federal funds rate is an interest rate that a bank charges another bank for overnight loans. O…

A: The given statement is true i.e. The federal funds rate is an interest rate that a bank charges…

Q: For each of the following actions (tools used) by BSP: Tools: A. BSP purchases bonds B. BSP…

A: Problem number 1) D) The Government (through a charted bank) deposits money at BSP is a…

Q: Discuss monetary vs interest rate targeting?

A: DISCLAIMER “Since you have asked multiple question, we will solve the first question for you. If…

Q: Rate (%) 10% 8% 6% MD 100 200 Money (S million) 25. Refer to Figure 3. If the money supply increases…

A: The cash supply is the aggregate sum of cash—money, coins, and balances in financial…

Q: Assume the initial deposit made by customers of Multi-Credit Savings and Loans Limited Kuntenase…

A: Hey, Thank you for the question. According to our policy, we can only answer 1 question…

Q: Money Demand 2 5 10 15 20 25 30 MONEY (Billions of dollars) After the increase in the price level,…

A: Investors should expect a higher interest rate or premium on assets with long-term maturities that…

Q: Suppose that initially the money supply is $2 trillion, the price level equals 4, the real GDP is $6…

A: Given:Initial price level=$4New price level=$4.4Change in price level=4.4-4=$4

Q: Figure 3: Msl.Ms1 Interest Rate (%) 10% 8% 6% Md 100 200 Money ($ million) 13. Refer to Figure 3. If…

A: An increment in the supply of money normally brings down financing costs, which thusly, creates…

Q: Suppose that initially the money supply is S2 trillion, the price level equals 4, the real GDP is $6…

A: An important theory of macroeconomics that relates the money supply in an economy and the price…

Q: 14 Monetary Base and Money supply are described as A) Monetary Hase is currency plus deposits and…

A: Money refers to a commodity that is generally accepted as a medium of exchange for goods and…

Q: Assume that $4.2 million is deposited into a bank with a reserve requirement of 15 percent.…

A: The money supply is all the currency and other liquid instruments in a country's economy on the date…

Q: Given that in an economy, Given that in an economy, C = 102+0.7Y, I=150-100r, MS =300, Mt = 0.4Y,…

A: The overall equilibrium of the economy is achieved when the goods market and the money market is in…

Q: QUESTION 4 Consider the model of money demand we saw in class. Let the elasticity of money demand…

A: The elasticity of demand refers to the degree of responsiveness with respect to change in price

Q: . Microsoft company is considering an investment project which costs $3 million today and it's…

A: Present value= future value / ( 1+ r )n

Q: c) The demand for money is given by: Md = 0.5Y - 2000r i. If the income level is Y =1000, and the…

A: The equilibrium interest rate is the rate of interest at which the quantity of money demanded is…

Q: QUESTION 6 Consider the model of money demand we saw in class. Let the elasticity of money demand…

A: Price elasticity of demand is defined as the percentage change in the quantity demanded for a good…

Q: n Friedman's theory, money demand is a function of a. average past income, current inflation,…

A: Answer is given below

Q: Imagine that the federal funds rate was above the level the Federal Reserve had targeted. To move…

A: The federal funds rate was above the target federal funds rate. There is a need to decrease the…

Q: Explain how each of the following developments would affect the supply of money, the demand for…

A: Hi, thank you for the question. As per the guidelines, we can only answer 1 question up to 3…

Q: Consider the model of money demand we saw in class. Let the elasticity of money demand with respect…

A: We need to refer to the demand for money in the LM equation. MDP = kY - hi Here, the left-hand side…

Q: Question 6 If the money multiplier is 3.5, a $10 billion increase in the monetary base Select one:…

A: Given, money multiplier = 3.5 Monetary base = $10 billion

Q: Suppose the monetary base is an economy is equal to 100 and nominal GDP is equal to 10,000. The…

A: Money supply refers to the stock of money held by peoples in the economy at a given point of time.…

Q: Assume that the going rate of interest in langston is 4% . However the fed set the current reserve…

A: Reserve requirement is the percentage of total deposits that the bank has to keep with the central…

Q: 11. Assume that in an economy the total money supply, Ms, is SR100; the quantity of output, Q, is 50…

A: The formula for finding the income velocity of money is V = (P * Q) / M where, P is the price of…

Q: instructions: tackle question b only A. Given that in an economy, Given that in an economy, C =…

A: Answer: (B) Note: in the given question the import and export function has been interchanged so I…

Q: Consider a small economy with only 2 banks, DSB and TKB, in the banking industry. Both banks have to…

Q: MS, MS, MD M2 M, QUANTITY OF MONEY The graph above shows a decrease in the money supply. Which of…

A: Monetary Policy refers to a policy of changing the economy through changes in required reserves or…

Q: Exhibit 3 (1) (2) (3) % Interest Rate Dt Da $100 5 12% 10 $0 20 40 60 80 100 100 100 100 100 100 4 2…

A: 100+60=160 at 6%.

Q: Suppose that initially the money supply is $2 trillion, the price level equals 4, the real GDP is $6…

A: M * V = P * Y Where, M = Money suppl V = Velocity of money P = Price level Y = Real GDP

Q: Consider the model of money demand we saw in class. Let the elasticity of money demand with respect…

A: Elasticity of money demand refers to the rate of change of money demand with respect to income or…

Q: Consider the model of money demand we saw in class. Let the elasticity of money demand with respect…

A: The demand for money: MD/P = kY -hi K = 0.8 h = -0.2 The left-hand side is the real money demand…

Question

100%

39. Which of the following are ways in which banks can help businesses in the United States? Choose all that
apply.
Banks can reduce the money supply through the use of the money multiplier.
Banks can serve as a stopgap to save struggling businesses from bankruptcy with small loans.
Bank loans remove personal liability from company owners.
O Bank loans are tax-deductible for businesses.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

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.