This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: When a commercial bank lends 1000 to a customer A) M1 and M2 decline by 1000. B) M1 and M2 rise ... (Read 185 times)

jake

  • Hero Member
  • *****
  • Posts: 538
on: Jun 29, 2018
When a commercial bank lends 1000 to a customer
 
  A) M1 and M2 decline by 1000.
  B) M1 and M2 rise by 1000.
  C) M1 rises but M2 does not change.
  D) there is no change in M1 or M2 until the loan proceeds are spent.

Question 2

Differentiate between principal and time value of money. John invests 100 in a bank for a year. At the end of the year he receives 125. What is the principal and time value of money in this case?
 
  What will be an ideal response?


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

cpetit11

  • Sr. Member
  • ****
  • Posts: 321
Reply #1 on: Jun 29, 2018
Answer to Question 1

B

Answer to Question 2

The amount of the original investment is referred to as principal, while time value of money is the interest or payment received for temporarily giving up the use of money that has been invested.
In this case 100 is the principal, while (125 - 100 ) or 25 is the time value of money.


jake

  • Hero Member
  • *****
  • Posts: 538
Reply #2 on: Jun 29, 2018
Correct answers!


cpetit11

  • Sr. Member
  • ****
  • Posts: 321
Reply #3 on: Jun 29, 2018
Great! Please up vote :D


« previous next »
 

Did you know?

Although not all of the following muscle groups are commonly used, intramuscular injections may be given into the abdominals, biceps, calves, deltoids, gluteals, laterals, pectorals, quadriceps, trapezoids, and triceps.

Did you know?

The training of an anesthesiologist typically requires four years of college, 4 years of medical school, 1 year of internship, and 3 years of residency.

Did you know?

When blood is deoxygenated and flowing back to the heart through the veins, it is dark reddish-blue in color. Blood in the arteries that is oxygenated and flowing out to the body is bright red. Whereas arterial blood comes out in spurts, venous blood flows.

Did you know?

It is difficult to obtain enough calcium without consuming milk or other dairy foods.

Did you know?

Cocaine was isolated in 1860 and first used as a local anesthetic in 1884. Its first clinical use was by Sigmund Freud to wean a patient from morphine addiction. The fictional character Sherlock Holmes was supposed to be addicted to cocaine by injection.

Because the leg muscles of children with muscular dystrophy are weak, they must perform the Gowers’ Because the leg muscles of children with muscular dystrophy are weak, they must perform the Gowers’
Bank teller assisting with customer service. Bank teller assisting with customer service.
A typical bank statement. A typical bank statement.
Lean 6 sigma - Fishbone Diagram - CAUSES & Effects OF LOW CUSTOMER SATISFACTION Lean 6 sigma - Fishbone Diagram - CAUSES & Effects OF LOW CUSTOMER SATISFACTION
A Radio Telescope in Green Bank, West Virginia A Radio Telescope in Green Bank, West Virginia
Rita borrows $4,500 from the bank at 9 percent annually compounded interest to be repaid in ... Rita borrows $4,500 from the bank at 9 percent annually compounded interest to be repaid in ...
Video: Coronary Heart Disease Animation

For a complete list of videos, visit our video library