Question

In: Economics

3. Utilizing T-accounts for all relevant actors, answer the following questions, a. If the FED buys...

3. Utilizing T-accounts for all relevant actors, answer the following questions,

a. If the FED buys a $10,000 treasury bill from Carlos Slim and he deposits the money in his bank, what happens to reserves and the monetary base?

b. If instead Carlos Slim deposits $5,000 in his bank and cashes in the remaining $5,000, what happens to reserves and the monetary base?

Expert Solution

a) If the FED buys a $10,000 treasury bill from Carlos Slim and he deposits the money in his bank then

Carlos Slim T-account

Assets	Liabilities
Securities -($10000)
checkable deposits $10000

Bank T-account

Assets	Liabilities
Reserves $10000	checkable deposits $10000

FED T-account

Assets	Liabilities
Securities $10000	Reserves $10000

Monetary Base= reserves + currency

If a person deposit whole amount in bank then reserves are inreases by $10000 and it cause Monetary Base to increase as well by the same amount.

b) If instead Carlos Slim deposits $5,000 in his bank and cashes in the remaining $5,000 then

Carlos Slim T-account

Assets	Liabilities
Securities -($10000)
checkable deposits $5000
currency $5000

Bank T-account

Assets	Liabilities
Reserves $5000	checkable deposits $5000

FED T-account

Assets	Liabilities
Securities $10000	Reserves $5000
	currency $5000

If a person deposit whole amount in bank then reserves are inreases by $5000 and currency is also increases by $5000 and it cause Monetary Base to increase as well by the amount $10000.

Rahul Sunny answered 6 months ago

a) Draw the T-accounts for Fred’s Bank if the FED buys a $20,000 treasury security from...

a) Draw the T-accounts for Fred’s Bank if the FED buys a $20,000 treasury security from Fred and Fred puts all the money he gets for it in the bank. Assume the reserve requirement set by the FED is 8%. (1 point) b) Economist A claims that this will result in a change in the money supply of $250,000. Explain how this is possible. (1 point) c) Economist B claims that the data shows the money supply only went up...

1. a) Draw the T-accounts for Fred’s Bank if the FED buys a $20,000 treasury security...

1. a) Draw the T-accounts for Fred’s Bank if the FED buys a $20,000 treasury security from Fred and Fred puts all the money he gets for it in the bank. Assume the reserve requirement set by the FED is 8%. (1 point) b) Economist A claims that this will result in a change in the money supply of $250,000. Explain how this is possible. (1 point) c) Economist B claims that the data shows the money supply only went...

Based on the T-Accounts below, answer the following questions: Work in Process Wages Payable Finished Goods...

Based on the T-Accounts below, answer the following questions: Work in Process Wages Payable Finished Goods Inventory 185,000 415,000 145,000 145,000 415000 385,000 125,000 170,000 Raw Materials Inventory Manufacturing Overhead 250,000 50,000 170,000 235,000 20,000 105,000 What is the cost of direct materials used? What is the cost of indirect materials used? What is the cost of direct labour? What is the cost indirect labour? What is the cost of goods manufactured? What is the cost of good sold? What...

Answer all questions. Show all of your work. Turn in all relevant computer STATA printouts. Problem...

Answer all questions. Show all of your work. Turn in all relevant computer STATA printouts. Problem 1 (20 points). Show work Consider the following regression on the average miles per gallon achieved by a random sample of 500 automobiles: MPGi = 20.4 + 2.5 FOREIGNi – 3.1 WEIGHTi + 1.2 (FOREIGNi*WEIGHTi) Where: MPGi is the average miles per gallon achieved by the ith car FOREIGNi is a dummy variable equal to 1 if the ith car is made outside the...

If you are not going to answer all the questions. then do not answer any. 3.)...

If you are not going to answer all the questions. then do not answer any. 3.) The following information concerns production in the Baking Department for March. All direct materials are placed in process at the beginning of production. ACCOUNT Work in Process—Baking Department ACCOUNT NO. Date Item Debit Credit Balance Debit Credit Mar. 1 Bal., 6,300 units, 4/5 completed 16,884 31 Direct materials, 113,400 units 226,800 243,684 31 Direct labor 65,490 309,174 31 Factory overhead 36,840 346,014 31 Goods...

Please answer all four (4) questions utilizing textbook, and independent research if necessary. Provide 'complete answers'...

Please answer all four (4) questions utilizing textbook, and independent research if necessary. Provide 'complete answers' to the questions - indicating your knowledge of the subject matter supported by specific details and examples. All sources MUST be cited. Question 1. What is meant by the term sovereignty? Why is it significant in international law? Question 2. Define the most-favoured-nation rule and describe two exceptions to the rule that are allowed by the GATT. Question 3. What are the two main...

Answer the follow questions utilizing MS Excel and the following functions: =norm.dist(), =norm.inv(), =t.dist(), =t.dist.rt(), and/or...

Answer the follow questions utilizing MS Excel and the following functions: =norm.dist(), =norm.inv(), =t.dist(), =t.dist.rt(), and/or =t.inv() Assume that adult women have pulse rates that are normally distributed with a mean of 74.0 beats per minute and a standard deviation of 12.5 beats per minute. Part 1: If 1 adult woman is randomly selected, find the probability that her pulse rate is between 68 beats per minute and 80 beats per minute. The probability is 36.88%. correct (Round answer to...

Answer the following questions. Show all work. 3. If the fixed costs for keeping the pool...

Answer the following questions. Show all work. 3. If the fixed costs for keeping the pool open all summer is $20,000 (of which $10,000 is allocated to open swim time as opposed to swim lessons or the swim team) and the variable costs of open swim is $.50 per person, how many people will it take to show a profit for the summer if you charge $1.50 per person for open swimming? How about $2.00 per person for open swimming?...

1a. Using t-accounts for the Fed and a commercial bank show the accounting entries for a...

1a. Using t-accounts for the Fed and a commercial bank show the accounting entries for a $25 million open market purchase. Explain what happens to the monetary base. b. Using t-accounts for the Fed and a commercial bank show the accounting entries for the repayment of a $25 million discount rate loan by a commercial bank. Explain what happens to the monetary base. c. Using t-accounts for the Fed, a commercial bank and a bank customer, show the accounting entries...

Please answer 3 (or all) of the 5 questions below the background information: THIS IS ALL...

Please answer 3 (or all) of the 5 questions below the background information: THIS IS ALL THE INFORMATION AVAILABLE Background: Some years back policy makers in the Kingdom of Bahrain were faced with rising inflation caused by the fall in the value of the US dollar relative to other currencies. The Kingdom’s currency unit, the Bahraini dinar (BD), is pegged to the dollar, so when the dollar goes down in value the BD goes down as well. A weaker dollar/dinar...