Explain how banks create money.
Question:
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 41% (12 reviews)
In a system of fractionalreserve banking banks create money because they ordinarily keep only a fraction of their deposits in reserve They use the res...View the full answer
Answered By
OTIENO OBADO
I have a vast experience in teaching, mentoring and tutoring. I handle student concerns diligently and my academic background is undeniably aesthetic
4.30+
3+ Reviews
10+ Question Solved
Related Book For
Macroeconomics
ISBN: 978-1464168505
5th Canadian Edition
Authors: N. Gregory Mankiw, William M. Scarth
Question Posted:
Students also viewed these Economics questions
-
Describe how banks create money. If the Fed wanted to use all three of its policy tools to decrease the money supply, what would it do?
-
How do banks create money?
-
Create an analogy or metaphor that explains how banks create and destroy money one that would be understood by someone with absolutely no background in economics.
-
Suppose Targets stock has an expected return of 20% and a volatility of 40%, Hersheys stock has an expected return of 12% and a volatility of 30%, and these two stocks are uncorrelated. a. What is...
-
The file P02_35.xlsx contains data from a survey of 500 randomly selected households. For this problem, consider this data set a simple random sample from all possible households, where the number of...
-
A business manufactures refrigerators for domestic use. There are three models: Lo, Mid and Hi. The models, their quality and their price are aimed at different markets. Product costs are computed...
-
A common procedure in metallurgy is solidification from a melt in a cylindrical mold. If the Jacob number is small we can use the pseudo-steady-state model, which should now include the conduction in...
-
Troyers long- term available- for- sale portfolio at December 31, 2012, consists of the following. Troyer enters into the following long- term investment transactions during year 2013. Jan. 13 Sold...
-
The following data were gathered to use in reconciling the bank account of Bradford Company: Balance per bank $ 18,050 Balance per company records 10,040 Bank service charges 50 Deposit in transit...
-
You are hired by one of the leading news channels CNBE who wants to analyze recent elections. This survey was conducted on 1525 voters with 9 variables. You have to build a model, to predict which...
-
Consider two savings accounts that pay the same interest rate. One account lets you take your money out on demand. The second requires that you give 30-day advance notification before withdrawals....
-
What are the two ways in which the Bank of Canada can influence the money supply?
-
The graphs show that the three components of love, namely, passion, intimacy, and commitment, progress differently over time. Passion peaks early in a relationship and then declines. By contrast,...
-
Seaco Products produced 10,000 gears with the following unit costs: variable manufacturing costs $23, fixed manufacturing overhead $6, variable selling and administrative expenses $2, and fixed...
-
Sally Burns meets with her physician complaining of a headache, sore throat, and coughing. She has a group health insurance through her employer which has a co-payment of $100.00. She pays the...
-
Girdwood Inc. has a trademark that it expects to have an indefinite life. The carrying value of the trademark is $750,000. As of December 31, 2022, the fair value of the trademark was $600,000. The...
-
The earth moving equipment that your uncle applies in his business was purchased during 2017 for R1 300 000. The accountant determined that the present value of future cash flows from the use of the...
-
Explain the 3 different methods of accounting for Depreciation.(Straight Line, Double Declining Balance, Units of Output or Production) Comment on the definition, calculation, journal entries, etc....
-
Use the Help function of Excel to learn more about the Excel Scenario Manager and the Excel Solver Add-in.
-
Show that the block upper triangular matrix A in Example 5 is invertible if and only if both A 11 and A 22 are invertible. Data from in Example 5 EXAMPLE 5 A matrix of the form A = [ A11 A12 0 A22 is...
-
Draw the long-run total cost and long-run average cost curves for a firm that experiences: a. Constant returns to scale over all output levels. b. Diseconomies of scale over low levels of output,...
-
A firm has the strange ATC curve drawn in the following figure. Sketch in the marginal cost curve this firm must have. Dollars ATC Quantity
-
The following curve shows the marginal product of labor for a firm at different levels of output. a. Show what the corresponding total product curve would look like. b. Do the total and marginal...
-
What advantage does the private resident buying oce (store-owned offices) aord its stores that independent buying oces do not? Describe two functions of an independent buying office. Describe the 4...
-
10. Consider the following data - == - -5 1 3 4 -1 0 1 1 (a) Find the Least Squares Regression Line. (b) Find the coefficient of correlation and determination. (c) Find a 90% confidence interval for...
-
Which point on the graph y=4x are closest to the point (0, 2)? (Hint: consider the distance formula between two points)
Study smarter with the SolutionInn App