XYZ bank has $500 of reserves, $500 of loans and $1000 of deposits. Let's suppose that the required reserve ratio is 10%. How much could the bank make in additional loans right now?  How much will be the excess reserves? How much could the bank make in additional loans right now? How much will the money supply increase after the money creation process is finished?

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A: Hi, thank you for the question. As per the guidelines, we are allowed to attempt only first question…

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A: Disclaimer: Since you have asked multiple questions, we will solve the first question for you. if…

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A: Required reserve ratio = 5% = 0.05 ------------------- Money multiplier = (1 / required reserve…

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A: Banking system: It refers to the system in which the banks provide loans and money to the people who…

Q: What are demand deposits and why should they be included in the stock of money?

A: Hello, thank you for the question. Since there are multiple questions asked here, only the first…

Q: Suppose that you are a bank with the following: • $200 of capital, and $2,000 of deposits. In this…

A: Require Reserve (7%)  = 7% of Deposit                                     = 0.07 * 2000…

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A: Reserve is the amount  kept by bank , on the directed by central bank  here we calculate the money…

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A:

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A: Here we calculate change in money supply by using multiplier as follow

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A: Given,  Required reserve ratio = 10% Which means that multiplier = 1/Requires reserve ratio = 1/10%…

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A: Required reserves = 10 percent of $150,000 = $15,000 Therefore, required reserves = $15,000

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A: Hey, thank you for the question. According to our policy we can only answer up to 3 subparts per…

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A: Reserve ratio is 5% => Money multiplier =  (1 / reserve ratio) => Money multiplier = (1 / 5%)…

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A: Level of Deposit = current reserve - excess reserve amount/ reserve requirement.

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Q: Discuss how a decrease in the required reserve ration increases the money supply.

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Q: What are demand deposits and why should they be included in the stock of money? (Word count: 100…

A: Any item that is accepted as payment for the goods and services provided by an economy is referred…

Q: Decisions for Tomorrow Suppose a person who is developing a card game crowdfunds $20,000 and holds…

A: given reserve ratio =    10%   crowd funds   $20,000