26) In which of the following situations would you prefer to be the lender?

SCENARIO 4. Notation: C = currency; D = demand deposits; T = time deposits; & S = saving deposits. Suppose M1 = C + D; M2 = C + D + T; M3 = C + D + T + S. Suppose also that C = .05D; T = .4D; & S = .3D. The Fed imposes the following reserve requirements: rd = .2; rt = .3; rs = .15. Banks keep the following excess reserve ratios: ed = .05; et = .06; & es = .07. Suppose D = $800. Hint: Find the money multiplier to answer the following questions. Also note that MS = m.MB 23) Refer to Scenario 4. For the money supply M1, the monetary base MB1 = $______. 24) Refer to Scenario 4. For the money supply M2, the monetary base MB2 = $______. 25) Refer to Scenario 4. For the money supply M3, the monetary base MB3 = $______.

26) In which of the following situations would you prefer to be the lender? A) The interest rate is 9 percent and the expected inflation rate is 7 percent. B) The interest rate is 13 percent and the expected inflation rate is 15 percent. C) The interest rate is 25 percent and the expected inflation rate is 50 percent. D) The interest rate is 4 percent and the expected inflation rate is 1 percent.

27) In which of the following situations would you prefer to be the borrower? A) The interest rate is 9 percent and the expected inflation rate is 7 percent. B) The interest rate is 4 percent and the expected inflation rate is 1 percent. C) The interest rate is 13 percent and the expected inflation rate is 15 percent. D) The interest rate is 25 percent and the expected inflation rate is 50 percent.

Expert Solution

Rahul Sunny answered 2 years ago

1.in which of the following situations would you prefer to be giving a loan ? a...

1.in which of the following situations would you prefer to be giving a loan ? a interest rate 4 inflation 1 % b interest rate 9 inflation 7% c interest rate 3 inflation 4% d interest rate 8 inflation 2

Of the following car financing options, which one would you prefer while assuming that you prefer...

Of the following car financing options, which one would you prefer while assuming that you prefer paying the least amount of dollars and that you face a 10% annual compound interest rate on all your financial decisions? A) A lump-sum payment of $20,000 in two years from today B) A payment of $10,000 today and another of $10,000 in one year from today C) A lump-sum payment of $19,000 today only D) A lump-sum payment of $20,000 today only (Please...

Describe two situations in which you would use a list; two situations in which you would...

Describe two situations in which you would use a list; two situations in which you would use a tuple, and two situations in which you would use a dictionary. Also do some research to learn about data structure sets, describe when and how to use sets.

Use intuition to decide which of the following you would prefer: (a) a salary of $35,000...

Use intuition to decide which of the following you would prefer: (a) a salary of $35,000 per year with no raises for 10 years or (b) a salary of $32,000 per year with annual raises of 3% per year of each of the next 10 years. Explain the reason for your choice.

Which if the following would you prefer to be buying based on yield to maturity (assume...

Which if the following would you prefer to be buying based on yield to maturity (assume n = 25)? A) A $10,000 par value security with a 9% coupon rate selling for $9,000 B) A $15,000 par value security with a 7% coupon rate selling for $15,700 C) A $20,000 par value security with a 9% coupon rate selling for $20,500. D) A $25,000 par value security with a 7% coupon rate selling for $25,500.

Which of the following drug specifies would you prefer for a possible drug to treat human...

Which of the following drug specifies would you prefer for a possible drug to treat human infection? A. drug that interferes with gyrase B. a drug that interferes with eukaryotic DNA polymerase C. a drug that interferes with an nuclear membrane stability D. a drug that interferes with a eukaryotic topoisomerase activity

2. Which of the following bonds would you prefer to be buying? Assume n = 30...

2. Which of the following bonds would you prefer to be buying? Assume n = 30 for all bond maturities. A) A $10,000 face-value security with a 6% coupon rate selling for $9,000. B) A $10,000 face-value security with a 6% coupon rate selling for $10,000. C) A $10,000 face-value security with a 6% coupon rate selling for $11,000. D) A $10,000 face-value security with a 7% coupon rate selling for $9,500. E) A $10,000 face-value security with a 7% coupon rate selling for $11,500....

If the interest rate is 6%, which of these investments would you prefer?

If the interest rate is 6%, which of these investments would you prefer? A single payment of $500 in year 3 A payment of $40 a year for 20 years starting in one year's time A perpetuity of $30 a year starting in one year's time A payment of $342.17 today

Which type of corporation (C or S) would you prefer as the business owner? Which would...

Which type of corporation (C or S) would you prefer as the business owner? Which would you prefer as the taxpayer? Recall how the income for each is treated to inform your response.

In which of the following situations do you think an auction would be more useful, and...

In which of the following situations do you think an auction would be more useful, and in which—fixed price? Items Seller knows nothing about buyers' WTP Seller knows that the highest WTP is $100 Seller knows that buyer's WTP falls somewhere between $0 and $100, with exactly one buyer willing to pay above $90 Seller knows that buyers' WTP falls somewhere between $0 and $100, with at least three buyers willing to pay above $90 Buyers are time-constra- ined

Question