erves 100,000 1. (Scenario: Assets and Liabilities of the Banking System) Accord
ID: 1128092 • Letter: E
Question
erves 100,000 1. (Scenario: Assets and Liabilities of the Banking System) According to the scenario Assets and Liabilities of the Banking System, suppose that the reserve ratio is 10% when the Fed buys $25,000 worth of U.S. Treasury bills from the banking system. If the banking system does not want to hold any excess reserves, money supply A) $666,667 B) $111,111 will be added to the $250,000 $1 million 2. This question refers to the accounting for U.S. international transactions. Suppose that a family from Peru eats in a restaurant in Salt Lake City, Utah. This transaction would appear in thea A) current account; payment from foreigners B) current account; payment to foreigners C) financial account; payment from foreigners D) financial account; payment to foreigners , and it would be entered as aExplanation / Answer
3. GDP = Consumption spending + Investment spending + Government purchases of goods and services + Exports - Imports = 7900 + 2100 + 2600 + 800 - 1200 = 12200
Answer is B) $ 12,200
5. B) fraction of deposits that the bank is required to hold.
6. A) increase; 500 million
Multiplier = 1/Reserve requirement = 1/0.1 = 10
Increase in MS = 50 million x 10 = $ 500 million
7. Investor will choose to invest in that fund whose rate of return is greater than interest rate of market.
This means all investment that provide rate of return > 11% will be included.
Total amount = 500 + 300 + 1000 + 200 + 2000 = $ 4000
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.