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 68 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?

Acetaminophen (Tylenol) in overdose can seriously damage the liver. It should never be taken by people who use alcohol heavily; it can result in severe liver damage and even a condition requiring a liver transplant.

Did you know?

People who have myopia, or nearsightedness, are not able to see objects at a distance but only up close. It occurs when the cornea is either curved too steeply, the eye is too long, or both. This condition is progressive and worsens with time. More than 100 million people in the United States are nearsighted, but only 20% of those are born with the condition. Diet, eye exercise, drug therapy, and corrective lenses can all help manage nearsightedness.

Did you know?

Many people have small pouches in their colons that bulge outward through weak spots. Each pouch is called a diverticulum. About 10% of Americans older than age 40 years have diverticulosis, which, when the pouches become infected or inflamed, is called diverticulitis. The main cause of diverticular disease is a low-fiber diet.

Did you know?

In 1864, the first barbiturate (barbituric acid) was synthesized.

Did you know?

Acute bronchitis is an inflammation of the breathing tubes (bronchi), which causes increased mucus production and other changes. It is usually caused by bacteria or viruses, can be serious in people who have pulmonary or cardiac diseases, and can lead to pneumonia.

Rise of the mobile phone Rise of the mobile phone
A typical bank statement. A typical bank statement.
An agglutination inhibition reaction. Commercial kit materials would create an agglutination ... An agglutination inhibition reaction. Commercial kit materials would create an agglutination ...
Total allowable and actual catch, Grand Bank Atlantic Cod 1959 -2012 Total allowable and actual catch, Grand Bank Atlantic Cod 1959 -2012
The Nile Delta will be strongly affected by a rise in sea level of 50 cm The Nile Delta will be strongly affected by a rise in sea level of 50 cm
One year ago, Christos bought 1000 units of the Dominion Aggressive Growth Fund at $20.35 per ... One year ago, Christos bought 1000 units of the Dominion Aggressive Growth Fund at $20.35 per ...
Video: Muscle cell structures - actin, myosin and titin filaments

For a complete list of videos, visit our video library