question 21 macroeconomics pation 18 Question 21: Macrolandia has a neratio of 5
ID: 1201373 • Letter: Q
Question
question 21 macroeconomics pation 18 Question 21: Macrolandia has a neratio of 5%. Households in Microlandia hold a ned armours o Jshartered bank (The First Bank) The central bank of Macrolandis imposcs a min has a vergy samf Macrolandis a very simple banking system, in which there is only facilitate their daily transactions and will deposit any excess arno nl of mor y into their bank The initial balance sheet of the First Bank is as follow: the form Assets Bank reserves oter Unless otherwise stated, the excess reserves held by the Frists of reserves current level as shown in the initial halance sheet and will lend out any surpius $600 Question 18 out any surplus of reserves beyond this. Suppose the central bank of Macrolandia conducts an open marke puse sre to show your equilibrium level of MS? Keep your answer to the nearest el of MS? Keep conaonducts an open market purchase of $140. What is the new sure to show your work = 2400 t(400+/40x20)) 14 800 Money supply: Question 19 Return to the initial situation. Suppose there is a series of credit fraud such that households increase their cash holding by $250.. When the banking system is back to equilibrium, the ultimate change in money supply is: (Keep your answer to the nearest integer and be sure to show your work). 2400 660 -4750 4 120 Change in money supply: 4tS0 Question 20 (Continued from Question 19) If the central bank of Macrolandia wants to keep the level of money supply from changing through deposit switching. What should the central bank do? What is the amount of government deposits should the central bank transfer between the government accounts? Amount of transfer: Action taken by the central bank: Lential bank to Commacral ant MGEA06 Final Exam Version A-Summer 2014 3:6Explanation / Answer
Changes in Loan = 100
New required reserve = 6%
New Money Multiplier = 1/0.06 = 16.66
So change in Money Supply = 16.66*100 = 16666
If you don't understand anything then comment , I'ill revert back on the same.
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.