If the Central Bank of Macroland puts an additional 3,000 dollars of currency Into the economy, the public deposits all currency into the banking system, and banks have a desired reserve/deposit ratio of 0.4, then the banks will eventually make new loans totaling and the money supply will increase by Multiple Choice $4.500; $7,500 $3.000, $3,000 $3.000; $4,500 $4.500; $4,500

Q: The actual change in the money supply equals :the change in reserves times the reserve requirement…

A: Money Supply: - In an economy, the total value of money in circulation at a point in time is known…

Q: Economists have several ways of defining what they mean by the "supply of money." Which of the…

A: So as per the economics money supply which is operating is known to be as the exact total value of…

Q: Suppose Never Bank (not the central bank), operating in (fictitious country) Neverland holds $100…

A: The reserve requirement is a monetary tool which is used by the central bank to to control the money…

Q: Assume that banks do not hold excess reserves and that households do not hold currency, so the only…

A: Formula to calculate money multiplier:-                                                    k=1/rr…

Q: Suppose that you take $150 in currency out of your pocket and deposit it in your checking account.…

A: Reserve Ratio – It is the minimum portion of deposit that must be held as reserve by the commercial…

Q: If a bank uses $500 of excess reserves to make a new loan when the reserve ratio is 20 percent, what…

A: If a bank uses $500 of excess reserves to make a new loan when the reserve ratio is 20 percent then…

Q: Answer the next question on the basis of the following consolidated balance sheet the commercial…

A: The amount the central bank needs to spend can be found using the money multiplier which is the…

Q: The central bank of the fictitious country "Alpha" raises bank reserves by $200. What effect will…

A: Bank Reserve is the ratio which is decided by the central bank for controlling the money supply in…

Q: If the required reserve ratio is 8%, the excess reserve ratio is 2%, and the currency-deposit ratio…

A: Money multiplier = 1+c/r+e+c c = currency-deposit ratio r = required reserve ratio e = excess…

Q: Suppose a month ago, total deposit collected by the banking system was 100 billion and total…

A: The money supply is the entire amount of money in circulation, including cash, coins, and bank…

Q: Explain whether each of the following events increases or decreases the money supply. a.The State…

A: Monetary policy refers to the actions adopted by the central bank involving the management of money…

Q: The U.S. money supply (M1) at the beginning of 2015 was $2,683.3 billion broken down as follows:…

A: We are going to discuss the checkable money deposits as a part of M1 money to answer this question.

Q: Describe in detail the differences between the three hypothetical countries money supplies, money…

A: The explanation will be below:

Q: You just earned $25.000 which you deposit it in a bank account, How much can fractional-reserve…

A: Credit creation refers to the expanision of deposits, bank can use credit  creation to increase the…

Q: Which of the following CANNOT explain why the multiple creation of money supply from checking…

A: Money supply: It means the total amount of money in circulation in a country.

Q: Suppose a bank has $2,500,000 in checkable deposits and the required reserve ratio is 10%. Also, the…

A: Given information,  Checkable deposits: $2,500,000 Required reserve ratio: 10% Total reserves:…

Q: If the required reserve ratio is 25 percent and the Fed buys a $20,000 security from a depository…

A: The amount of cash or currency circulating in an economy is referred to as the money supply. The…

Q: Given an economy with the following characteristics: Currency in circulation K4, 000, Reserve in the…

A: Currency in circulation K4, 000, Reserve in the interest banking =K5, 500 Reserve Dependent…

Q: suppose a commercial banking system has $300,000 of outstanding checkaable deposits and actual…

A: 30,000*0.1/100=30

Q: What are deposits and the money supply if the required reserve ratio is 50% and reserves are 5,000…

A: The money multiplier is inversely related to the required reserve. It means as the required reserve…

Q: Suppose the central bank conducts an unusually large open market purchase of bonds held by banks of…

A: There are types of macroeconomic policies: Monetary policy and Fiscal policy. Monetary policy is…

Q: The Central Bank of the US. published this information about money supply in 2019: Currency…

A: Money in most simple words defined as a medium of exchange. It has been divided into various forms…

Q: If the reserve requirement is 25%, then a $1 increase in deposits means that the money supply:…

A: Money supply can be calculated as follows:

Q: Assume that the following table portrays the balance sheet of First Eastern bank.

A:

Q: 22.  In the United-States, the money supply, narrowly defined (M1), contains: Group of answer…

A: M1, M2, M3, and M4 are measures of money supply.

Q: What is fiat money? What is commodity money? Which kind do we use?

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

Q: Suppose that the required reserve ratio is 10%, currency in circulation is $620 billion, the amount…

A: Answer: As asked I am answering the first four sub-parts. Given, Required reserve ratio (RRR) = 10%…

Q: In an economy with commercial banks with the required ratio of the reserve to deposit of 0.2, an…

A: Total units generated = Initial deposit * Money multiplier

Q: The Fed (US central bank) has reduced the required reserve ratio (RR) to zero percent effective on…

A: The money supply is the supply of currency in an economy. It means the money supply rises with the…

Q: What is the defining difference among our various measures of money supply, such as M1 and M2?…

A: Money supply: It is the sum total of money that is in circulation in an economy over a specified…

Q: The central bank of the fictitious country "Alpha" raises bank reserves by $200. What effect will…

A: money multiplier is depend upon the reserve requirement , if reserve require ratio is high…

Q: Assume that individuals do not hold currency. If the reserve ratio is equal to 5 cent, then if the…

A: Required reserve ratio is the minimum requirement of reserve that banks are needed to hold which…

Q: money supply will immediately:

A: Option (1) is correct. Immediate increase in money supply = amount of bonds purchased Overall…

Q: Assume that the required reserve ratio is 5 percent. If a commercial bank has $2 million cash in its…

A: Given  Required reserve ratio rr = 5% Cash in vault =  $2 million Govt security = $1 Million…

Q: If the currency deposit ratio is 20 percent, the reserve ratio rr is 20 percent and each bank loans…

A: The money multiplier shows the proportionate change in the money supply when the deposits or the…

Q: If currency in circulation equals $500 million, checkable deposits equal $2 billion, reserves equal…

A: Here given information is, Currency (C): $500 million Deposits (D): $1 billion Reserves (R): $200…

Q: The Third National Bank has reserves of $20,000 and checkable deposits of $100,000. The reserve…

A: 1)In the bank’s balance sheet, the deposits are the liabilities and the reserves are the…

Q: A.The Fed cannot control the amount of money that households choose to hold as currency.   B.The Fed…

A: Reserve requirement: The reserve requirement is the amount that banks have to maintain each night.…

Q: Suppose that required reserve ratio is 10%, currency in circulation is $400 billion, the amount of…

A: Money supply refers to the total amount of money circulation in the economy including deposits in…

Q: reserve requirement is 25%, then a $500 increase in deposits means that the money supply

A: Deposit multiplier or money multiplier = 1/ CRR = 1/ 25% = 100/25 = 4  So deposits will increase by…

Q: erve has decided it wants to increase interest rates by decreasing the money supply through deposits…

A: Given reserve ratio = 10 % Decrease in money supply = 100 million Money multiplier = 1 / reserve…

Q: The current Required Reserve Ratio is 10% and Bank A sold a treasury bill to the Federal Reserve to…

A:

Q: Assume that a country X has following money market conditions, after the large-scale asset purchases…

A: Money Supply : M(s) = Currency in Circulation + Deposits  High Powered Money : B =  Currency +…

Q: Suppose that currency in circulation is $800 billion, the amount of checkable deposits is $1200…

A: Answer;

Q: Suppose that in a hypothetical Country XYZ, the required reserve ratio is 2%, currency in…

A: The overall amount of currency in circulation in the hands of people, or in terms of deposits in…

Q: If the required reserve ratio is 8 percent, currency in circulation is $350 billion, checkable…

A: Given: Required reserve ratio=rr= 8% Currency in circulation = $350 billion checkable deposits =…

Q: Suppose First Main Street Bank, Second Republic Bank, and Third Fidelity Bank all have zero excess…

A: Deposit amount is $1,500,000. Reserve requirement is 20%.

Q: When the Fed wishes to decrease the money supply, it can a. increase the required reserve…

A: The Fed generally chooses a counter-cyclical monetary policy to influence the market condition. It…

Q: Suppose the monetary base is $100. If the currency-deposit ratio is 0.20 and the reserve-deposit…

A: Money multiplier is one of various closely related ratios of commercial bank money to central bank…