Discuss the relationship between the reserve ratio and the
maximum money creation. Why is the actual money creation smaller
than the maximum money creation implied by the model of
multiple-deposit expansion? ( 2 points )
Calculate the money supply in case of Fractional reserve banking
system. Pretend the Reserve Ratio is by 5%.
Borrowers first withdrew the loan from 1st National
Bank and deposited it in 2nd National Bank.
Borrowers Took The Loan from 2nd National Bank and
Deposited it in 3rd National Bank
Then Borrowers withdrew finally the loan from 3rd
National Bank and deposited it in 4th National
Bank.
Questions: a- Open a T Account for each Bank
with the previous situations.
b-Show...
What is the relationship between the inventory turnover ratio
and the "days of inventory"? For a given amount of cost of goods
sold, as inventory turnover ratio increases, the "days of
inventory"
cannot be predicted to increase or decrease
increases
initially increases, then decreases
decreases
a)How is Money Supply controlled? What is the relationship
between money and inflation?
b)Use the money market to explain the interest-rate effect and
its relation to the slope of the aggregate demand curve.
Assume that money lent by a bank is deposited into the banking
system. The reserve ratio is 20% and the Fed sells $100 million of
bonds on the open market. Using this information, answer the
following questions.
How would the M1 money supply change immediately (and by how
much) as a result of the sale of bonds?
As a result of the $100 million sale of bonds on the open
market, calculate the maximum change in the money supply over...
1. When the Federal Reserve decreases the required reserve
ratio,
A.The money supply will increase.
B.The money supply will decrease.
C.There is no effect on the money supply.
D.Not enough information is given.
2. The United States is divided into ___ Federal Reserve
Districts. The Federal Reserve Bank's Board of Governors consists
of ___ members appointed by the president of the U.S. to 14-year,
non-renewable terms. One of the board members is appointed to a ___
year, renewable term as...
What is the relationship between a bank’s capital ratio and the
risks and returns faced by (i) its depositors and (ii) its
shareholders? Explain your answers
Please be specific thanks!