Assume that when the central bank make a open market purchase of $100m, the money supply ultimately

Fantastic news! We've Found the answer you've been seeking!

Question:

Assume that when the central bank make a open market purchase of $100m, the money supply ultimately changes by $500m. Assume also that banks hold 10% excess reserves and no cash holding.

a) What is the money multiplier and what is the required reserved rate in this country?

b) Show the changes in the T-account of the banking system.

Related Book For answer-question

Modern Principles of Economics

ISBN: 978-1429278393

3rd edition

Authors: Tyler Cowen, Alex Tabarrok

See More Books

Posted Date: Sep 28, 2020 09:04 PM

See More Questions

The following information is directly from the books of Charles Le Clerc Engineering (Pty)Ltd. A registered VAT Vendor during October 2020. VAT is levied at 15% Transaction Excluding VAT Including...
The following information is to be used for questions 21 through 25 Starship Corp. acquired 100% of Jefferson Inc. on April 1, 2018 for $1,300,000. Payment was in the form of $600,000 in cash and...
2. The following information is taken from French Corporation's financial statements: (6 points) December 31 2021 2020 $ 27,000 80,000 (3,100) 175,000 6,800 60,000 244,000 (13,000) 35,000 $611,700...
Why have some firms gone to voluntary benefits as opposed to discretionary benefits?
Explain whether there are any benefits to adding bonds to a stock portfolio in a global investment strategy.
Find giving each term in its simplest form. [(8.x + 6x - 3 d.x,
Priming is required in a (a) gear pump (b) screw pump (c) reciprocating pump (d) centrifugal pump
Newly formed Home Medical Corporation has 100,000 shares of $5 par common stock authorized. On March 1, 2012, Home Medical issued 10,000 shares of the stock for $12 per share. On May 2 the company...
Find a general solution to the given Cauchy-Euler equation for t> 0. at dy +21-6y=0 dt- The general solution is y(t) = .
An airline company wishes to reduce the customer waiting time at the gates at a major airport using Taguchi Design of Experiments. The management decides to use Taguchi design of experiments for this...
On January 1, 2020, Sandhill Company leased equipment to Flynn Corporation. The following information pertains to this lease. 1. 2. 3. 4. 5. 6. The term of the non-cancelable lease is 6 years. At the...
You purchase a house and obtain a 3 0 - year loan of $ 1 9 5 , 0 0 0 at an annual interest rate of 8 . 3 0 % . ( Round your answers to the nearest cent. ) ( a ) What is the mortgage payment? $ ( b )...
Annual interest rate is 5%. If you deposit 10,000 yen now, how much can you get after 1 year? The answer should be the total of principal and interest.
Denote the spot euro rate (/$) by S, the forward euro rate (/$) by F, and the forward premium by p. The dollar interest rate is denoted by is, which is equivalent of home interest rate, and the euro...
A company purchases a computer system for $20000. The following graph shows the depreciation of the computer system over the five years period. How much is the rate of depreciation per year? VA 20000...
Joseph lives in an apartment and pays $ 1 , 2 0 0 in rent and $ 1 5 0 in utilities. He has $ 1 2 , 0 0 0 in his savings account, a car valued at $ 7 , 5 0 0 , and $ 3 , 2 1 6 in credit card debt. He...
code in python i For this task, you may assume that all Double Key Table and all Infinite Hash Table methods are O(1), even if they obviously are not. Also note you're welcome to edit and add...
Describe basic managerial approaches to implementing controls and how these are implemented.
To keep things simple, lets put this into a familiar supply and demand story and assume that in the long run, workers offer a fixed supply of labor: In other words, while they may be picky about jobs...
A large number of economic and psychological studies demonstrate that people who are impatient in one area of their life tend to be impatient in other areas as well. This isnt true in every single...
Which of the following actual government programs show up as costs in the federal budget? The Department of Labor mandates the minimum wage for workers. The Environmental Protection Agency mandates...
Briefly explain the difference between accounting, finance, and engineering economics. Try to put the concepts in your own (or your team's) words and compare the concepts where appropriate.
What are the two key financial objectives in the management of a company? How can a focus on these objectives create ethical dilemmas?
Among your colleagues in class, identify a term or phrase italicized in this chapter that you think is the most significant from your reading. Absent team consensus, then just provide your...

Assume that when the central bank make a open market purchase of $100m, the money supply ultimately

Question:

Expert Answer:

a Money multiplier 1required reserve r... View the full answer

Modern Principles of Economics

Students also viewed these accounting questions