Use the following data to answer the below question.Required reserve $50Checkable deposits $500Savings Deposits $50Excess reserves $180Currency held by the public $160The money multiplier is 1.69The Fed conducts an open market purchase of $81.What will be the change in the money supply $ 136.89 answer? /Round to 2 decimal places/What is the change in checkable deposits? 103.85These are the correct answers and I know that1.69 * $81 = $136.89, but I don't know how toget the 103.85 change in checkable deposits.Please help

The formula to calculate the change in the money supply (CMS) is Total Reserve Money multiplier…

Answered: Use the following data to answer the…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Given the following information Reserve requirement for demand deposits = 12% Cash in circulation = RM 210 millions Demand Deposits = RM 574 millions Money Market Deposits = RM287 millions Reserves loaned from Central Bank = RM 15 millions Non-loan reserves in Central Bank = RM94 millions Excess Reserves = RM 0.96 millions Assume that the money market deposit is not subject to reserve requirements. i) Calculate the value of money multiplier for M1 and M2 ii) If you wish that the Central Bank will expand its monetary base (M1) so money supply (M1) would grow by 3% over the next one year, how much should the monetary base change in order to realize the changes?
Blue Corporation requires a P150,000minimum cash balance on its:checkingaccount. Based on the control limit model, itsspread should be P120,000. If as of the end ofthe day, the cash balance is P30,000, it shouldinfuse cash or (invest in marketablesecurities) amounting to : a. 160,000b. 190,000c. 240,000d. 120,000
Suppose that a lottery winner deposits $20 million in cash into her transactions account at the Bank of America. Assume a reserve requirement of 20 percent and no excess reserves in the banking system prior to this deposit. Show the changes on the Bank of America balance sheet when the $20 million is initially deposited. Instructions: Round your responses to one decimal place
Imagine that the banking system's balance sheet can be represented by the following t-account: Assets LIABILITIES AND NET WORTH RESERVES 200 DEPOSITS 2000 BONDS 800 LOANS 1000 NETWORTH 0 TOTAL 2000 TOTAL 2000 Assuming the bank is "loaned up" the required reserve ratio is ___________ (round to two decimal places) The money multiplier is ___________ Imagine that the central bank uses open market operations to buy $300 worth of bonds from the bank above. Fill in the following t-account assuming that the money multiplier has taken its full effect: ASSETS LIABILITIES AND NET WORTH RESERVES __?___ DEPOSITS ___?__ BONDS ____?___ LOANS ____?____ NET WORTH ___?___ TOTAL _____?______ TOTAL ___?___
Wasn't the $25,000 on the initial Reserve considered Required Reserve? If so, the Excess Reseve would originally be $75,000 (100,000*0.75). When the household deposited $4,000 into the bank, the Deposits increased from $100,000 to $104,000. Since the Required Reserve Ratio was 25%, that means, Required Reserve increases $1,000 (4,000*25%), and has $26,000 ($104,000*25%) or ($25,000 + 1,000). As a result, the Excess Reserve now increased 3,000 (4,000 -1,000), and becomes $78,000 ($75,000 + 3000). Wasn't the answer supposed to be $78,000?
1. Which of the following is considered as a Cash Equivalent? -Postal money Order -Check -Treasury Bill Issued 1 year ago Acquired and Maturing 3 months from now -Treasury Bill Issued 5 Months Ago , Acquired and Maturing 4 months from now 2. Which of the following is Considered Cash? -Pension Fund -sinking Fund "Bond Attached is 2 year maturity" -Fund to buy PPE for Next Year -Petty Cash Fund 3. Which of the following would result in a Dr to AR? - -Sale of goods under " special order" "Special order is yet to be completed" -Sale with a right of repurchase -Sale of goods under "Consignment" -Sale of goods classified as Trade 4. When inventory is held on consignment it should be? - -Reported as cost of goods sold -Recorded as inventory -Derecognized -Reported as purchase 5. the Following are classified under PPE Except? - -Machinery -All are PPE -Building -Land 6. Which of the following is classified under PAS 16 -…
Let us assume that a bank acquired reserves and deposits equal to ₱1,000 with a required reserve of 10% as imposed by the central bank. Solve for the amount of money that the bank can lend, given the reserves that are legally required to support the ₱ 1,000 deposit and the money multiplier
A new bank has vault cash of $1.7 million and $5 million in deposits held at its Federal Reserve District Bank. a) the required reserves ratio is 8 percent, approximately what dollar amount of deposits can the bank hold? (Answer in millions) Bank deposits $Type your answer here million b) If the bank holds $72 million in deposits and currently holds bank reserves such that excess reserves are zero, what required reserves ratio is implied? (Round answer to 1 decimal place, e.g. 5.1.) Required reserves ratio Type your answer here
Beleaguered State Bank (BSB) holds $200,000,000 in deposits and maintains a reserve ratio of 10%, which also is the reserve requirement. On paper, write the T account for BSB and use it to answer the rest of this question. Now suppose that BSB's largest depositor withdraws $10,000,000 from her account one day. On paper, show the effect of this on the T account. How many dollars of cash reserves does BSB need to raise to be allowed to open for business the next morning?
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Assume that the following balance sheet portrays the state of the banking system. The banks currently have no excess reserves. Assets Liabilities and Net Worth (Billions of Dollars) Total reserves 5 Checkable deposits 100 Loans 45 Securities 50 Total 100 Total 100 What is the required reserve ratio? 25% 40% 10% 5% Suppose that the Federal Reserve (the "Fed") buys $8 million of bonds from a bond dealer, who immediately deposits the funds in her checking account. What is the initial impact of this transaction? Checkable deposits rise by $8 million, and the banking system's holdings of securities rise by $8 million. The banking system's holdings of securities rise by $8 million, and the banking system's total reserves fall by $8 million. The banking system's holdings of securities fall by $8 million, and the banking system's total reserves rise by $8 million. Checkable deposits rise by $8…
Assets Liabilities Reserve 100 Deposits 1000 Loan 900 Total 1000 Total 1000 Instructions: The value of required reserve ratio (RR) is Answer% Now assume the amount of $100 were deposited inside the bank The value of immediate change in deposit is Answer The value of immediate change in reserveAnswer The value of immediate change in loan is Answer{ The size of deposit multiplier is Answer The value of final change in deposit is Answer The value of final change in reserveAnswer The value of final change in loanAnswer The value of final change in money supply isAnswer

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