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EBK MACROECONOMICS
7th Edition
ISBN: 9780134738970
Author: O'Brien
Publisher: PEARSON CUSTOM PUB.(CONSIGNMENT)
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Question
Chapter 14, Problem 14.2.6PA
To determine
The Effect of M1 money supply.
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Students have asked these similar questions
Does the fact that your bank keeps only a fraction of your account balance in reserve worry you? Why don't people rush off to the bank and retrieve their money? What would happen if they did?
How much new amount of loan will this bank be able to create because of the excess reserves?
Your answer is incorrect.
The economy of Greatstown currently has $60.00 million worth of currency in circulation, $2.00 million worth of traveler's
checks, $5.00 million in small time-deposits, and $30.00 million in savings deposits. Total M1 is equal to $120.00 million.
Calculate the amount of checkable deposits in Greatstown: 58000000
Chapter 14 Solutions
EBK MACROECONOMICS
Ch. 14 - Prob. 14.1.1RQCh. 14 - Prob. 14.1.2RQCh. 14 - Prob. 14.1.3RQCh. 14 - Prob. 14.1.4RQCh. 14 - Prob. 14.1.5PACh. 14 - Prob. 14.1.6PACh. 14 - Prob. 14.1.7PACh. 14 - Prob. 14.1.8PACh. 14 - Prob. 14.1.9PACh. 14 - Prob. 14.2.1RQ
Ch. 14 - Prob. 14.2.2RQCh. 14 - Prob. 14.2.3PACh. 14 - Prob. 14.2.4PACh. 14 - Prob. 14.2.5PACh. 14 - Prob. 14.2.6PACh. 14 - Prob. 14.2.7PACh. 14 - Prob. 14.2.8PACh. 14 - Prob. 14.2.9PACh. 14 - Prob. 14.2.10PACh. 14 - Prob. 14.3.1RQCh. 14 - Prob. 14.3.2RQCh. 14 - Prob. 14.3.3RQCh. 14 - Prob. 14.3.4RQCh. 14 - Prob. 14.3.5PACh. 14 - Prob. 14.3.6PACh. 14 - Prob. 14.3.7PACh. 14 - Prob. 14.3.8PACh. 14 - Prob. 14.3.11PACh. 14 - Prob. 14.3.12PACh. 14 - Prob. 14.4.1RQCh. 14 - Prob. 14.4.2RQCh. 14 - Prob. 14.4.3RQCh. 14 - Prob. 14.4.4RQCh. 14 - Prob. 14.4.5PACh. 14 - Prob. 14.4.6PACh. 14 - Prob. 14.4.7PACh. 14 - Prob. 14.4.8PACh. 14 - Prob. 14.4.9PACh. 14 - Prob. 14.4.10PACh. 14 - Prob. 14.4.11PACh. 14 - Prob. 14.5.1RQCh. 14 - Prob. 14.5.2RQCh. 14 - Prob. 14.5.3RQCh. 14 - Prob. 14.5.4PACh. 14 - Prob. 14.5.5PACh. 14 - Prob. 14.5.6PACh. 14 - Prob. 14.5.7PACh. 14 - Prob. 14.5.8PACh. 14 - Prob. 14.5.9PACh. 14 - Prob. 14.5.10PACh. 14 - Prob. 14.1RDECh. 14 - Prob. 14.2RDECh. 14 - Prob. 14.3RDECh. 14 - Prob. 14.4RDECh. 14 - Prob. 14.5RDECh. 14 - Prob. 14.6RDE
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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.Similar questions
- How has bitcoin evolved over time, and how may it evolve further in the future? Does it fully fulfil all three functions of money?arrow_forwardWhat amount of additional money supply can a bank system create if the required reserves rate is 10%, and deposits are $5 million?arrow_forwardWhy can banks continue to hold reserves that are only a fraction of the demand deposits of their customers? Is your money safe in a bank? Why or why not?arrow_forward
- Why do banks practice fractional reserve bankingarrow_forwardThe First National Bank of Townville has $125,000 in U.S. government securities, $200,000 in savings accounts, $300,000 in checking accounts, $50,000 in its reserve account at the Fed, $10,000 of currency in its vault, and loans of $250,000. What is the amount of its reserves? Show your calculations.arrow_forwardIf I own Hawkins Savings and Loan, and a customers makes a $8,000 deposit, what is the total amount I am able to lend if the reserve requirement is 15%?arrow_forward
- Does the fact that your bank keeps only a fraction of your account balance in reserve make you uncomfortable? Why don’t people rush to the bank and retrieve their money? What would happen if they did?arrow_forwardWhat proportions of your money balance are held for transactions, precautionary, and speculative purposes? Can you think of any other purposes for holding money?arrow_forwardRequired reserves in Bank two should be 10% of $80,000 demand deposits which equals 8,000. Correct?arrow_forward
- Why does the Federal Reserve limit how much a bank is allowed to "multiply" its deposits?arrow_forwardA depositor decides to transfer $3000 from a checking account to a savings account. Create a balance sheet for the bank and show how the balance sheet will be affected due to this change. Only list the changes on your balance sheet. Then explain what will happen to the M1 and M2 money supplies.arrow_forward
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