How much potential money could be created from a new deposit of $2,000 and with a reserve ratio of 10%? How would it affect the ability of bank to create money if the reserve ratio decreased to 5%?

Answers

Answer 1

Answer:

To calculate the effect of the bank's ability to create money with a decrease in reserve ratio.

Given:

New deposits= $2000, Reserve ratio= 10 percent

To calculate the money multiplier= 1/10%= 1/0.1= 10

To calculate the money that was created we multiply the multiplier by the new deposits.

Therefore: 10*2000= $20,000

To calculate the amount created when the reserve ratio is 5%

To calculate the money multiplier= 1/5%= 1/0.05= 20

Therefore the money created will be 20*2000= $40,000

Based on $20000 extra gained, a decrease in the reserve ratio to 5% will lead to an increase in the capacity f the bank to make more money.

Explanation:

To calculate the effect of the bank's ability to create money with a decrease in reserve ratio.

Given:

New deposits= $2000, Reserve ratio= 10 percent

To calculate the money multiplier= 1/10%= 1/0.1= 10

To calculate the money that was created we multiply the multiplier by the new deposits.

Therefore: 10*2000= $20,000

To calculate the amount created when the reserve ratio is 5%

To calculate the money multiplier= 1/5%= 1/0.05= 20

Therefore the money created will be 20*2000= $40,000

Based on $20000 extra gained, a decrease in the reserve ratio to 5% will lead to an increase in the capacity f the bank to make more money.


Related Questions

Taki works for a start-up company that is highly centralized and its employees are not allowed to wear headphones while working. However, the company offers a flexible work schedule, free childcare, and free yoga classes. These rules and perks describe the company's ______.

Answers

Answer:

organizational culture

Explanation:

Organizational culture can be defined as the beliefs and culture of an organization that helps in the establishment of the structure and strategy to run the organization. These cultural beliefs and ideas help the employees understand and work according to the desired thoughts of the organization. They know the ways to deal and behave in accordance with the organizational values.

In the given excerpt, the rules and regulations that Taki's start-up company has, are said to be the organizational culture of the company. The flexible work schedule, free childcare, and free yoga classes are some of the rules and regulations.

Mike has a car accident and Maria saves his life. To show his appreciation, Mike gives Maria a life estate in one of the homes he owns. Maria lives there for a while and then accepts a job in another state so she gives the property to her sister Jackie in a lawful transaction. Jackie owns the property until:

Answers

Answer:

Jackie owns the property until Maria dies

Explanation:

In this specific scenario, Jackie owns the property until Maria dies. That is because, in common law and statutory law, a life estate also known as life tenancy is defined as the ownership of land for the duration of a person's life. Therefore since Mike granted life estate to Maria and not Jackie, the land is legally Maria's to do as she wishes up until the moment of her death. Once this comes to pass the land ownership is returned to Mike.

Shelley has been hired as a marketing specialist at a large, international firm. On Shelley's first day of work, she attends an orientation session. Which of the following is LEAST likely to be addressed during Shelley's orientation program?
A) organizational structure
B) company policies and rules
C) compensation and reward system
D) daily and weekly task requirements

Answers

Answer:

D) daily and weekly task requirements.

Explanation:

In this scenario, Shelley has been hired as a marketing specialist at a large, international firm. On Shelley's first day of work, she attends an orientation session.

In the orientation session, what new employees are most likely to be briefed or talked to about is the organizational structure, company policies and rules and compensation and reward system. In human resources management, it is important to get new employees acquainted with the essential informations, rules, regulations, and guidelines that exist in an organization.

Hence, daily and weekly task is least likely to be addressed during Shelley's orientation program because she's not likely to commence her duties on the first day and her responsibilities or roles would be introduced to her by her functional or line manager.

If the economy is hit by a negative real shock that raises inflation and unemployment, which fiscal policy action should the government take in order to keep inflation and unemployment stable?

Answers

Answer: There is no fiscal policy action that can keep the inflation and unemployment stable.

Explanation:

If there is a negative real shock such as an oil crisis, it will be hard fir the affected economy to adjust and be stable.

A negative real shock will lead to a reduction in growth and a rise in inflation. Even in cases whereby there is an increase in the money supply, this will lead to a rise in real growth but the result will be that there will be an higher inflation

Therefore, there is no fiscal policy action that can keep the inflation and unemployment stable.

Dairy Farm enters into a contract with EZ Serve Ice Cream Company to supply milk. Later, Dairy decides that it is no longer advantageous to fulfill the contract and subsequently fails to perform as promised. EZ files a suit against Dairy. A breach of contract occurred when:_________
A) Dairy entered into a contract with EZ.
B) Dairy decided that it was not advantageous to fulfill the contract.
C) Dairy failed to perform the acts promised in the contract.
D) EZ filed a suit against Dairy.

Answers

Answer:

C

Explanation:

A breach of contract occurs when one of the parties to a contract decides not to honor all or some of the terms spelled out in the contract. In other words, a breach of contract occurs when actionable terms in the contract are neglected by one of the parties to the contract.

The actionable term in the contract signed by both Diary Farm and EZ Serve Ice Cream Company is for Diary Farm to supply milk to EZ Serve Ice Cream Company. Hence, not supplying milk as agreed represents a breach of the contract, all other things being equal.

Correct option: C

Which of the following is an example of competitive parity? A firm provides wall clocks that its consumers value more than other wall clocks. A firm sells wall clocks at a lower price than its competitors. A firm produces a similar number of wall clocks at a similar cost as its competitors. A firm manufactures higher-quality wall clocks than its competitors.

Answers

Answer:

A firm produces a similar number of wall clocks at a similar cost as its competitors.

Explanation:

Competitive parity, as the name implies, is a situation in which a firm has a similar good or service to that of its competitors. These similarities can manifest in quality, cost, or both.

Im this case, if a firm produces a similar quantity of wall clocks, and sells them at a similar price, then, this firm has a competitive parity with its competitors.

If my friend asks me for 20 dollars i said tommorow you have to give me 25. IS THIS BIG BRAIN

Answers

Answer:

kinda

Explanation:

You'll obviously expect a little interest .

If i were you though i'll give the person up to 3 days to pay back before adding a little interest to it.

PLEASE add your loving THANKS

16. Marginal thinking involves:a. accurately calculating the opportunity cost of a decision.b. always acting in your own self-interest.c. comparing the total benefit and total cost of a decision.d. weighing the incremental benefit against the incremental cost of a decision.

Answers

Answer:

weighing the incremental benefit against the incremental cost of a decision.

Explanation:

In Business management and economics, Marginal thinking involves weighing the incremental benefit against the incremental cost of a decision.

When individuals such as a decision-makers or project manager, is implementing and executing a project, it is very essential and important that he does marginal thinking; by weighing the overall and potential benefits or gains to be derived from that project in comparison with the costs of execution.

Hence, when the incremental benefits is greater than the incremental cost of the decision, then it is logical and safe to make the move or do it.

A salesperson is listing a property in a mostly Hispanic neighborhood that is owned by Hispanic sellers. He advertises the property in several Spanish-language community newspapers, thinking the most likely buyers would already be renting in the neighborhood. What additional step would best help him avoid charges of discrimination

Answers

Answer:

The salesperson should advertise the property in Portuguese-language community newspapers as well in papers that circulate beyond the community/neighborhood

Explanation:

The additional step to be taken by the sales person to help him avoid charges of discrimination would be The salesperson should advertise the property in Portuguese-language community newspapers.

This is because in a Hispanic neighborhood there are two major languages that are most probably spoken and written there and they are Spanish and Portuguese hence the salesperson has to advertises in both languages.as well in papers that circulate beyond the community/neighborhood

________ determines the point at which the sum of carrying costs and ordering costs are minimized, or the point at which carrying costs equal ordering costs. Group of answer choices Reorder point Economic Order Quantity When to order Inventory turnover

Answers

Answer:

Economic Order Quantity

Explanation:

The economic order quantity is the quantity at which the ordering cost and the carrying cost is minimized and equivalent to each other. It is the quantity that should be purchased by the company so that the cost of ordering and the holding cost could be less

The formula to compute it is shown below:

[tex]= \sqrt{\frac{2\times \text{Annual demand}\times \text{Ordering cost}}{\text{Carrying cost}}}[/tex]

Hence, the correct option is b i.e. economic order quantity

The purpose of the _____ stage of the new product development process of a company is to estimate costs and forecast sales for each idea to get a sense of the potential profit and of how the product might fit within the company's resources.

Answers

Answer:

reproducing cycle

Explanation:

i did it

Which is true? Group of answer choices If data is not available, management cannot measure analysts’ performance. The best companies typically place an emphasis on one extremely important goal. Team performance is only as good as the performance of the analysts on the team. All of the above.

Answers

Answer: If data is not available, management cannot measure analysts’ performance.

Explanation: Analysts render help to businesses by gatheriby external and internal data and communicating this data clearly to all stakeholders, facilitators and partners Invokv in the organizatio. An analyst main role is to  principally interprete data, formulate reports and make recommendations based upon the research findings. Without this data the management can’t judge the performance of an analyst.

Network design decisions have a significant impact on performance because they determine the supply chain configuration and set constraints within which inventory, transportation, and information can be used to either decrease supply chain cost or increase responsiveness. True or False

Answers

Answer:

true

Explanation:

Winona's Fudge Shoppe is maximizing profits by producing 1,000 pounds of fudge per day. If Winona's fixed costs unexpectedly increase and the market price remains constant, then the short run profit-maximizing level of output
a. is less than 1,000 pounds.
b. is still 1,000 pounds.
c. is more than 1,000 pounds
d. becomes zero.

Answers

Answer:

b. is still 1,000 pounds.

Explanation:

profit-maximising level of output is found where marginal cost = marginal revenue

if fixed cost increases, the marginal cost still remains unchanged. so, the profit-maximizing level of output remains unchanged

Moonglow Specialties, Inc., is currently trading at $20 per share. Recently, the company reported net income of $1 million. The company is capitalized with 200,000 common shares and $5 million of 20-year debentures with a coupon of 4%. Given the data, Moonglow's price-to-earnings (P/E) ratio is closest to

Answers

Answer:

P/E ratio = 4

Explanation:

the price to earnings ratio formula:

P/E ratio = stock's market price / earnings per share

earnings per share (EPS) = (net income - preferred dividends) / average outstanding shares

net income = $1,000,000

preferred dividends = $0

average outstanding shares = 200,000

EPS = $1,000,000 / 200,000 = $5

P/E ratio = $20 / $5 = 4

Martha is a 40 percent partner in the MMM Partnership, with an outside basis of $50,000. MMM distributes $40,000 cash and accrual-basis accounts receivable with a basis and fair market value of $20,000. Martha does not recognize gain or loss on the distribution and takes a basis in the cash of $40,000 and a basis in the receivables of $10,000.
a) true
b) false

Answers

Answer:

True

Explanation:

Based on the information given we were told that Martha does not recognize gain or loss on the distribution and takes a:

Basis in the cash of $40,000 which is TRUE because we were told that MMM distributes $40,000 cash to Martha

Basis in the receivables of $10,000 which is TRUE because we were told that she has an outside basis of $50,000 with distributed cash of $40,000 and accrual-basis accounts receivable of $20,000. Therefore the basis in the receivable of $10,000 is calculated as:

Cash $40,000 + Account receivable $20,000=$60,000

Hence,

$60,000- Outside basis $50,000

=$10,000 Basis in the receivable

_ are best described as the ethical standards and norms that govern the behavior of individuals within a firm. Organizational core values Corrective controls Job descriptions Customs duties

Answers

Answer:

organisational core values

An organization with a(n) _____ structure operates much like a multinational corporation, but subsidiaries depend on headquarters more for process and production decisions. Group of answer choices

Answers

Answer: International

Explanation: The International organizational structure adopts a somewhat central control policy which is used to manage and direct the affairs of multinational firms or corporation. Multinationals refers to businesses operating in more than one nation. The international structure ensures that the control division of the corporation handles affairs that has to do with international relations including organization, coordination and control by defining or outlining roles, responsibilities, chores and relationship within the the organization.

According to noted economist Thomas Piketty rev: 10_02_2018_QC_CS-138299 Multiple Choice top executives are entitled to any level of pay they can negotiate with their board of directors. the annual pay for top executives should include a small guaranteed salary and should include a very large bonus in years where the firm earns higher profits than competitors. all bonuses paid to CEOs should be tied to long-run increases in market share. the income inequality between the salary of company CEOs and the average salary at the company is harmful and unnecessary.

Answers

Answer:

the income inequality between the salary of company CEOs and the average salary at the company is harmful and unnecessary.

Explanation:

Thomas Piketty is classified as an extremely social economist along with Joseph Stiglitz and Paul Krugman. Some confuse them as liberal economists, when they are actually against liberal or neoclassical economies. The three of them are famous for promoting economic fairness and equality. E.g. Piketty opposes extremely high CEO salaries while low level employees earn wages that are dangerously close to the minimum wage. He believes that this type of management practices are unsustainable and damage the economy in the long run.

Personally, I believe that the most important sector of the economy is the middle class and that the larger the middle class, the better.

Which of the five Rs of good governance in sport refers to systems that report organizational governance structures, constitutions, legal control mechanisms, event selection criteria, and codes of eligibility, conduct, and ethics?

Answers

Answer: Regulations

Explanation: Regulations as related to good governance in sports encompasses the structural and most of the non-technical requirements and injunctions required to maintain a good organizational structure. It may be explained as a management skeleton or framework which is very paramount in the orderly control and Maintainace of any organized body. The legal processes and procedures, ethical standards, code of conduct. The other R's include rules, ranking, records and result.

Suppose farmers in a given market can either grow soy beans or corn on their land. In addition, suppose an increase in the demand for corn causes the price of corn to increase. All else equal, an increase in the price of corn creates an incentive for farmers to: Multiple Choice switch away from growing soy beans and into growing corn. grow less corn, but not change their production of soy beans. switch away from growing corn and into growing soy beans. grow more corn, but not change their production of soy beans.

Answers

Answer:

switch away from growing soy beans and growing corn

Explanation:

if the price of corn increases,it would be an incentive for farmers to increase their production of corn so as to increase their profits.

The degree to which firms should segment their markets depends on the balance the firm wants to achieve between the added perceived customer value that segmentation can offer and its ___________.

Answers

Answer:

Cost

Explanation:

SEGMENTATION can be defined as the process or ways of dividing or segmenting business market into groups or parts based on the types of features or characteristics they shared which is why MARKET SEGMENTATION is important and vital to company or organisation because it enable them to easily target the people or individual that are likely to be satisfied with their product.

Hence, For a firm, company or organisation to segment their markets it will depends on the balance that the company or organisation wants or desire to achieve between the customer value that the market segmentation can offer and its COST.

Mr. Chase has opened a custom furniture business and is concerned about the costs associated with storing raw materials, machinery, and finished products. Mr. Chase should consider using a method of production known as just-in-time (JIT) production to help control his inventory costs
Indicate whether the statement is true or false.

Answers

Answer:

True

Explanation:

Just In Time Production keeps Inventory Levels at minimum by requiring the Company to hold only the inventory that is required by a particular production .This method opposes keeping of Inventory for production which has not been commenced.

Caroline is an artist. She purchases canvas, paints, brushes, and accessories for $75. She sells one of her original paintings to an art gallery for $1,500, even though an art lover would pay $4,500 for that painting. How much value does Caroline add

Answers

Answer:

1.425 dollars of value added

Explanation:

The value of the painting added by Caroline is between the $75 dollar of raw materials and the $1,500 which is the amount at which she sold the canvas in the art gallery.

If, over the course of time the canvas market value increase this will not change the value added by Caroline.

1,500 - 75 = 1.425 dollars

Bay Beach Industries wants to maintain their capital structure of 40% debt and 60% equity. The firm's tax rate is 34%. The firm can issue the following securities to finance the investments:
Bonds: Mortgage bonds can be issued at a pre-tax cost of 9 percent. Debentures can be issued at a pre-tax cost of 10.5 percent.
Common Equity: Some retained earnings will be available for investment. In addition, new common stock can be issued at the market price of $46. Flotation costs will be $3 per share. The recent common stock dividend was $3.60. Dividends are expected to grow at 6% in the future.
What is the cost of capital using debentures and external equity?
a. 10.96%
b. 13.12%
c. 11.30%
d. 11.69%
e. 11.35%

Answers

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b

c. 11.30

After much discussion, Chad finally agrees to go to the opera with his wife. As they are finding their seats he says, sarcastically, "Yeah, this is going to be a lot of fun* This is an example of which conflict style?
a. avoidance
b. assertion
c. compromise
d. direct aggression
e. passive aggression

Answers

Answer:

e. Passive aggression

Explanation:

Passive aggressive behaviors can be defined as a type of behaviour which a person or an individual exhibit , which makes such person to express their negative feelings through their actions or by being indirectly aggressive instead of handling their feelings directly which is why a person or an individual with this type of behaviour often have resistance to requests by acting stubborn reason been that such person may feel angry or frustrated and act neutral, and then find an indirect ways to show how they really feel instead of communicating directly.

Secondly a person which PASSIVE AGGRESSIVE BEHAVIOUR will often posses this type of trait such as Trying to play the victim when issue arise, making excuses, blaming others for their action, hiding their anger, Trying to avoid direct communication just as in the case of Chad.

Therefore based on the information given about Chad,This is an example of PASSIVE AGGRESSION conflict style.

In the contracting process, a licensee must be careful to:__________
a. avoid giving the principal any advice about the transaction.
b. describing the normal requirements of a contract to a client.
c. drafting a contract illegally.
d. pointing out to the principals the importance of meeting contingency deadlines.

Answers

Answer:

c. drafting a contract illegally.

Explanation:

In the contracting process, a licensee must be careful to drafting a contract illegally. The licensee can be defined as an individual or group of people holding a license given to them by an authority or authorized agencies, to engage legally in an activity.

Hence, it is required by law that whatever the licensee does after the acquisition of a license must be legal and not a violation of standard rules, and policies of the state or society. Licensee are to abide by the terms and conditions of the license.

redatory pricing refers to a. a firm selling certain products together rather than separately. b. a monopoly firm reducing its price in an attempt to maintain its monopoly. c. firms colluding to set prices. d. All of the above are examples of predatory pricing.

Answers

Answer:

b. a monopoly firm reducing its price in an attempt to maintain its monopoly.

Explanation:

The predatory pricing is the pricing in which the firm charged a lower price of products and services they are providing to the customers so that the competition would not be exist and the motive of this pricing is forcing other firms to leave the market

Therefore in the given situation, the option b is correct as it fits for the monopoly.

High and unexpected inflation has a greater cost Group of answer choices for savers in low income tax brackets than for savers in high income tax brackets. for those who hold a little money than for those who hold a lot of money. for those whose wages increase by as much as inflation than those who are paid a fixed nominal wage. for those who save than for those who borrow.

Answers

Answer:

for those who save than for those who borrow.

Explanation:

Inflation is a persistent rise in general price levels

inflation is unexpected if it is unanticipated and not factored in to factors such as interest rate.

savers are at a disadvantage when there is high and unexpected inflation because the value of savings would fall fast.

while borrowers are at an advantage because they repay less in value than what what they borrowed

Importers Direct arranged to have a French winery ship a large quantity of fine wine to the United States. By signing a(n) ______________, Importers Direct authorized its bank to make full payment to the French winery if and when the wine arrives at the Importers Direct warehouse in Philadelphia.

Answers

Answer: letter of credit .

Explanation:

A letter of credit is known as

a trade finance mechanism also known as "letter of undertaking" used as a guarantee document that the payment of goods and services will be fulfilled between a seller and a buyer.It is also known as documentary credit or a bankers commercial credit.

Hence, Importers Direct arranged to have a French winery ship a large quantity of fine wine to the United States. By signing a letter of credit , Importers Direct authorized its bank to make full payment to the French winery if and when the wine arrives at the Importers Direct warehouse in Philadelphia.

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