If the monetary base (B) is $1,110 billion and the money supply is $8,800 billion Group of answer choices A) The money multiplier mush be 0.125. B) Nominal GDP must be $7,700. C) The money multiplier mush be 8. D) The money multiplier mush be 7.7. E) The money multiplier mush be 7.
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If the monetary base (B) is $1,110 billion and the money supply is $8,800 billion
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- Explanation it correctly Q)Assume that some people who receive bank loans do not deposit the full amount of the loan into a bank. This will cause the money multiplier to be the bank deposits multiplier. A) smaller than B) greater than C) neither greater than or smaller than D) the same asSuppose following a 25% increase in the monetary base, the money supply rises by 80%. The simple money multiplier is _______.Suppose an increase in the monetary base of $200,000 increases the quantity of money by $800,000. Calculate the money multiplier. The money multiplier is _____ Thanks
- Consider an economy for which the current GDP is $800 billion, “the” multiplier is 3, the income multiplier with respect to the money supply is 4, the money multiplier is 5, the marginal tax rate is 20%, the real interest rate is 3%, the current budget deficit is $30 billion, the long‐run real rate of growth is 2%, the current money supply is $200 billion, the rate of money supply growth is 10%, and financial innovations are decreasing money demand by 1% per year. Marks are given for your explanations, not the final answer. What should be the long‐run rate of inflation? What should be the price of a T‐bill due to mature in six months at its face value of $1,000?If the money multiplier is determined to have a value of 5 and the Fed wants to increase the money supply by $10 billion, then it must cause the monetary base to _____ by _____. a. increase....10 billion b. increase... 2 billion c. decrease....10 billion d. decrease....2 billion e. increase...5 billion f. decrease....5 billionGive typing answer with explanation and conclusion If the monetary base increases by $1 million and the quantity of money increases by $2.5 million, then the money multiplier is _
- Q.1.6 Which of the following will cause the demand curve for money to shift to theright?(a) An increase in real Gross Domestic Product (GDP).(b) A decrease in the repo rate.(c) An increase in the quantity of money available.(d) A decrease in the quantity of money available.Q.1.7 A budget deficit occurs when: (a) there is an increase in taxation.(b) government spends less than is generated by taxation.(c) government spending is very high.(d) Government spends more than is generated by taxation.Q1. Assume the initial deposit made by customers of Multi-Credit Savings and Loans Limited Kuntenase branch for the month of April, 2020 was GH₵ 150,000.00 (One hundred and fifty thousand Ghana cedis). However, the Bank kept 25% of the deposits as reserves whiles the remaining was given out as loans and advances to customers.i. Find the money multiplier effect for Multi-Credit Savings and Loans Limited for the month of April, 2020. ii. Calculate the total deposit made by customers of the Bank. Q2. Why does interest rate links the two halves of the IS – LM model together? Q3. Using IS-LM curves, critically examine how government spending on coronavirus disease, 2019 (covid 19) will impact on the national output (income) Q4. ‘‘Increase in money supply in an economy increases inflation’’. Use appropriate diagram(s) to explain the validity or otherwise of the above statement. Q5. Briefly explain how open-market operations could be used to increase money supply.Most people in the country of Classica tend to keep $3 out of every $100 of their cash holdings in their wallets. The central bank has instructed the commercial banks to also hold 4% of all bank deposits as reserves. Calculate the extended money multiplier Extended Money Multiplier = (1+C/D) / (R/D+C/D) (1+0.03) / (0.04+0.03) = 14.71 The extended money multiplier is 14.71 Suppose that in 2018 customers deposit $4,000 into their bank accounts. Based on the extended money multiplier calculated in part (i), calculate the total amount which the money supply in the banking system will eventually increase to. Show all steps involved in the calculation.
- If the money multiplier is 5 and the Fed sells $1 million worth of bonds, what happens to the money supply? Group of answer choices It decreases by $10 million. It increases by $10 million. It decreases by $5 million. It increases by $5 million.Q.1.5 Which one of the following statements is NOT true? (a) Money is the most liquid asset.(b) Money is a store of value.(c) Money is a unit of account.(d) Money is another term for income.Q.1.6 Which of the following will cause the demand curve for money to shift to theright?(a) An increase in real Gross Domestic Product (GDP).(b) A decrease in the repo rate.(c) An increase in the quantity of money available.(d) A decrease in the quantity of money available.Q.1.7 A budget deficit occurs when: (a) there is an increase in taxation.(b) government spends less than is generated by taxation.(c) government spending is very high.(d) Government spends more than is generated by taxation.Q)Suppose that the money multiplier is originally equal to 3. However, due to lack of confidence in private banks, the money multiplier is reduced to 1.9. How much does the monetary base need to increase (in percentage terms) in order to keep the money supply constant?n
