1 In Ecomomics What is the 2Narne the most important-onent of our nation\'s Mono
ID: 1104329 • Letter: 1
Question
1 In Ecomomics What is the 2Narne the most important-onent of our nation's Monoluutna, the Asset-d -90% of the tula-of- abwe .sane mathenatkal statement. use that statene" ation por example, or9/1oor.9,thenthese mofth. following am 4 Diaing the mathematical principle in questions, de the saM of dhis serie 1 (inth s case "a-is 80% which "tho one-er as the hetson 4/S or 8) Uning the mathematical principlequestion # eminetheSUM of (8753+187.5- gin this "w.is 87.9% which is te sanne nun her as the haction 7/B or r75) 6. Deine a commercial bank's Reserve Assets answer: Bank's Reserve Assets )bank'aholdines af vault cash andea) Where commercial hank's deposits at the FED are their primary Reserve Asset 7. Define the reserve ratlo the neenve rudo is the fruction of & Define the Excess Beserves of a commerdal banke answer.Commercial banla Bncess Rserves are their total Reserve Assets minus their Required Reserves Where a commercial bank's Required Reserves msene ratio times theirdepealt customer'schecking account balances or neserve.ratio times demand deposts g. When commercial banks have positive (+) Excess Reserves,they can and. in general will create money and when they create money, the Nation's Money supply wi Increase. List two possible transaction conducted by commencial banks with the money they created, (Le list two things they do with the money they create) a (answer1) the commercial banks will loan the money created to houset b. (answer2) The commercial banks will use the money created to b comercial banks have negative Excess Reserves, they are in violation of Banking Law and they have to ac pre Reserve Assets so that their excess supphy 10. When do not rematn negative and in the process of getting reserve assets they will destroy money, and when they destroy money, the Nation's Money Nat's Mney supply Qe list two reserves will decrease. List two possble tranactions conducted by thing banks do to get reserves from other banks in the banking system) (answer 1): the commercial banks will checking account balances of Households commerdal banks, as they get reserve assets and decrease the take mone seholds.nonsorsovernments banswer 2): commercial banks will: Recall loans made to households i 11 Who holds ALL of the Nation's Money Supply
Explanation / Answer
2) Currency with public and Demand Deposit with the Public.
4) [1+80%+(80%)^2+…] = 1+80/100+(80 /100)^2+(80/100)^3+…
= 1/(1-(80/100))
=1/(100-80)/100
=100/20
=4
5) [1+87.5%+(87.5%)^2+…] = 1+87.5/100+(87.5/100)^2+(87.5/100)^3+…
= 1/(1-(87.5/100))
=1/(100-87.5)/100
=100/12.5
=8.
7)The reserve ratio is a fraction of Bank’s deposits that it must keep with it as per the directions of the Central Bank.
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.