The wow expert Hand written solution is not allowed.Solve full question with proper explanation will upvote.Hand written solution is not allowed Sapling Learningmacmilan leamingSuppose you win on a scratch-off lottery ticket and you decide to put all of your $3,500 winnings in thebank. The reserve requirement is 10%.What is the maximum possible increase in the money supply as a result of your bank deposit?$NumberWhich events could cause the increase in the money supply to be less than its potential?Check all that apply.☐Banks decide to keep some excess reserves on hand.All money loaned out is deposited back into the bankingsystem.Some loan recipients choose to hold some cash instead ofdepositing all of it in banks.Banks choose to loan out all excess reserves.HintPrevious Check AnswerNext

The initial deposit = $3,500Reserve requirement ratio (r) = 10% = 0.10 Money…

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Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter21: The Monetary System

Section: Chapter Questions

Problem 3PA

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Below is the balance sheet for a bank. Under "Other" it has listed "$X" just think of this as the dollar amount needed to make the balance sheet balance. It is not important what that value is for this question. AssetsLiabilitiesReserves 44Deposits 255Loans 155 Securities 51Other $X Using the balance sheet above, find the level of excess reserves this bank is holding if the required reserve ratio = 6%(Give answers to 2 decimal places as needed)
8:29 1 v) Cai be ustu lu purtTiast tommvultits, but TIUL services. 18) Fiat money has A) little to no intrinsic value but is backed by the quantity of gold held by the central bank. B) a great intrinsic value that is independent of its use as money C) value, because it can be redeemed for gold by the central bank. D) little to no intrinsic value and is authorized by the central bank or governmental body
You take $100 you had kept under your mattressand deposit it in your bank account. If this $100stays in the banking system as reserves and if bankshold reserves equal to 10 percent of deposits, byhow much does the total amount of deposits in thebanking system increase? By how much does themoney supply increase?
If your grandmother gives you a $20 bill and you deposit that into your and M2 Money. checking account, then M1 money. O stays the same; stays the same O decreases; increases increases; increases O increases; decreases increases; stays the same
If the bank at which you keep your checking account isowned by foreigners, should you worry that your depositsare less safe than if the bank were owned by Americans?
1. You deposit $100 of currency into your account. Explain what happens to reserves , checkabledeposits, and monetary base? 2. Explain what the shadow banking system is and how it works. 3. Your bank has the following balance sheet:Assets LiabilitiesReserves $70 million Checkable deposits $200 millionSecurities $50 millionLoans $130 million Bank capital $50 millionIf the required reserve ratio is 10%, what actions should the bank manager take if there is anunexpected deposit outflow of $50 million? Explain your answer. 4. Explain and demonstrate graphically that if the central bank pursues targeting a monetaryaggregate, it is likely to lose control over the interest rate. 5. In the market for reserves, the federal funds rate is equal to the interest rate paid on excessreserves. Explain and demonstrate graphically the effect of an open market sale on the federalfunds rate.
Let's say that you have put $1,000 in your savings account at a local financial institution, and an employee of the banks tells you that the bank does not have the money you deposited in its vault (or anywhere else) in the bank. 1. Could the employee be correct and, if so, then where is the money that you deposited into your savings account? 2. Should you be worried about getting your deposit back from the bank? Why or why not?
Celine, another manager at a different branch of MillerBank in a different region of the country, faces a reserve requirement of 10%. She has excess reserves 0f $1000. What’s the maximum amount that she could increase the money supply? a.500 dollars b.1000 dollars c.10000 dollars d.100 dollars e.2000 dollars
Table 10-2 Last Bank of Cedar Bend Assets: Reserves Loans Liabilities: $25 000 Deposits $180 000 S155 000 efer to the Table 10-2. If the reserve requirement is 10 percent and then someone deposits $50 000 into the bank, what is the bank's reserve osition? alect one: cross a. It will have $52 000 in excess reserves. cros b. It will need to raise reserves by $5000. cros c. It will have $57 000 in excess reserves. d. It will have excess reserves of $2000.
BALANCE SHEET OF BANK A (S IN MILLIONS) ASSETS LIABILITIES and NET WORTH Reserves (Cash/Reserves at Fed) 550 Demand Deposits $100 Losns 20 Govt. Securities 90 Net Worth (Owners' Equity) What is the net worth of this bank? 2. If the required reserve is 10%, what is the amount of REQUIRED RESERVES that this bank must bold? 3. What then is the mount of EXCESS RESERVES that this bank is now holding? How much does this bank have available for NEW LOANS? 5. If the required reserve is increased to 20%, whal is the amount of REQUIRED RESERVES that this bank must bold?
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I need help on D through H! Please! Suppose the reserve requirement is 8% and a new deposit of $900 billion is made into the banking system. Create T accounts to analyze the following questions. a) Initially, reserves would increase by? $900 Billion b) Required reserves would increase by? $72 billion c) Excess reserves would increase by? $828 billion d) The first round of loans would amount to? e) The second round of loans would amount to approximately? f) For the entire macroeconomy, after the infinite rounds of loans were taken into account, money supply would increase by? g) If the Federal Reserve bought bonds worth $600 billion, money supply would increase by? h) If the Federal Reserve sold bonds worth $600 billion, money supply would decrease by?

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