What are demand deposits and why should they beincluded in the stock of money?

Q: If the public has a currency ratio of 0.2 and banks have a reserve ratio of 0.2, how much cash does…

A: here we calculate the need of money supply which print by central bank , so we calculate the…

Q: Why was the Federal Reserve System set up withtwelve regional Federal Reserve banks rather than…

A: The federal reserve system of the Fed is the central banking system of the United States, comprised…

Q: Why does the Federal Reserve require commercial banks to have reserves? What is the difference…

A: Reserves plays an important role in regulating money supply in the economy. Reserves are assets for…

Q: What are the complications in the process of deposit expansion and deposit contraction?

A: The deposit expansion is the money created by the reserve banking, in which the money that is…

Q: which of the following are functions of the Federal Reserve System? Check all that apply O…

A: Supervising member banks: Following the establishment of rules and regulations, supervision—which…

Q: What proportions of your money balance are held for transactions, precautionary, and speculative…

A: Money is anything which can be used as a medium of exchange, store of value and unity of account.…

Q: What are the main functions of money ?

A: Money refers to anything that is widely accepted in an economy as payment in exchange for goods and…

Q: Classify each of these transactions as an asset, a liability,or neither for each of the “players” in…

A: Getting a $10,000 loan from the bank to buy an automobile is a asset to the bank because it has the…

Q: List the 3 functions of money.

A: STEP1 The main functions/purpose of money are: acting as medium of exchange, as a store of value,…

Q: Write and explain the functions of money.

A: Money: It is anything which is widely accepted in exchange of goods or discharge of other kind of…

Q: Which of the following is an example of fiat money? Oa U.S. one-hundred dollar bill O a government…

A: Answer: Correct option: A (a U.S. one-hundred dollar bill) Explanation: Fiat money refers to the…

Q: Assume that an economy has multibank system. is a person deposits $5,000 into a bank that is…

A: Money will be multiplied  it depend on the reserve requirement because afterwards whole amount will…

Q: How is a bank able to lend more money than it has in reserves?

A: Banks depend on a fractional reserve banking due excess lending of actual deposits on hand by banks…

Q: If a bank has $150 million in deposits and $25 million in reserves with a reserve requirement of…

A: Here we calculate the following terms by using the given information so the calculation of the…

Q: What is the name of the bank's department whose role is to ensure that work complies with the…

A: In a Bank their are many departments for different works, One of them is compliance department which…

Q: Answer with graph and analysis How online banking affects money demand?   Subject :…

A: The desire for people to keep money in the form of cash or in the form of bank deposits is referred…

Q: The amount of loans that a bank can create is limited by Select one: O a. laws enacted by…

A: The economies around the globe are involved in various types of economic, and financial activities.…

Q: Does the money supply "Cash held by public" get included in the calculation of the federal reserve…

A: The reserve requirement is the amount that the commercial banks have to keep aside out of total…

Q: Espinoza has $1,000 in cash, he deposits the total amount in Legion Banc. How much can LegionBanc…

A: In the banking sector, when an individual deposited his money, the proportion of this money is used…

Q: a. What are the initial values for DD, L, and M?   DD= $20,000 L= $18,000 M= $5,000     b. What…

A: The excess reserve does not affect the value of DD. The value of excess reserve can be calculated as…

Q: Your uncle repays a $100 loan from Tenth NationalBank (TNB) by writing a $100 check from his…

A: Tenth National bank

Q: (a) Why do households hold money? What type of bank deposits are included in the money supply?

A: In an economy, money is used as the medium to make economic activities such as buying or selling of…

Q: Why are credit cards excluded from the equation for money supply?

A: The amount is the sum of the cash, coins and bank account balances in  circulation. The total amount…

Q: In the United States, which of the following systems was established to be in charge of money?Choose…

A: The United States of America's central bank is the Federal Reserve which is also known as the Fed.…

Q: Explain how banks create money using your own example of a T-account.Define the deposit and RRR…

A: A deposit is a term used in finance to describe money deposited in a bank. A deposit is a financial…

Q: What are the functions of money?

A: The functions of money are: 1. Store of value 2. Medium of exchange  3. Unit of account 4. A…

Q: During recessions, banks typically chose to hold more excess reserves relative to their deposits.…

A: Monetary Policy: It refers to the decision of the central bank regarding the amount of money supply…

Q: If a bank has total deposits of $9,000,000 and reserves of $3,000,000 Instructions: Enter your…

A: Reserve requirements are the sums of money held in reserve by a bank to ensure that it can meet its…

Q: Does m2 , m1 or m3 include current deposit at bank ??

A: In macroeconomics, money is important as it is used to carry daily transactions and for making…

Q: What are the 3 major instruments that central banks can useto control money supply? Can you explain…

A: Monetary policy refers to the credit control system adopted by the central bank of a country with an…

Q: If a bank has a compulsory reserve ratio of 20% and a prudential reserve ratio of another 5%. How…

A: The total increase in deposits = Initial deposit * Money multiplier

Q: In fractional-reserve banking system, such as we have in the united states, banks create money. How…

A: A fractional reserve banking system refers to a system in which banks hold reserves whose value is…

Q: Can you think of a reason why people in general donot lend money to one another to buy a house or…

A: They’re likely coming to you because they can’t get a loan from a bank. which means traditional…

Q: How do private commercial banks multiply the quantity of money placed in circulation by the Federal…

A: Answer: Introduction: Federal Reserve is responsible for maintaining money supply in the economy. It…

Q: Where does the Central Bank's profit go?

A: Central Bank of an economy cab earn profit in terms of interest income as it provides loan to the…

Q: If a bank has total deposits of $6,000,000 and reserves of $1,20 Instructions: Round your responses…

A: Total deposit = $6000000 reserves = $1200000

Q: e. If the Bank of Uchenna is not meeting its reserve requirement, what action can it take to meet…

A: Brief about above parts- Dollar value of Reserve = 20% of deposit = 20% of $100000 = $20000 Here the…

Q: loans. By law, banks are permitted to lend: O their deposits O all of their reserves O their…

A: According to the guidelines of the central bank, every commercial bank in the economy has to keep a…

Q: If rr = 25% and you withdraw $100, what happens to A the bank has zero excess reserves b. $50 in…

A: Financial institutions must maintain a certain amount of bank reserves to meet central bank…

Q: What will be the demand deposits as cash reserve ratio is 18.5% and the cash reserves operating in…

A: Initially in the given question, We need to calculate the demand deposit = ? Cash reserve ratio are…

Q: One of the instruments available for controlling money supply is Open Market Operation (OMO).…

A: Monetary policy is used to influence the money supply in the economy . And there are various tools…

Q: If the banking system has 5 million excess reserves and the required reserve ratio is 25% what is…

A: The value of the money multiplier is calculated on the basis of the percentage of the reserve…

Q: Why do banks practice fractional reserve banking? A. It ensures that all customers can withdraw…

A: The central bank is the bank or financial institution that controls the money supply in an economy.…

Q: Over the years, the Federal Reserve Banks have printed many billions of dollars more in currency…

A: The federal reserve system refers to the central banking system that is followed in the U.S. Many…

Q: How does Adverse Selection potentially affect a Bank and how can a bank overcome (some of) the risk…

A: Adverse selection occurs when buyers have better information than sellers, and this can distort the…