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

Author Question: Assuming a required reserve ratio of 10 and the Fed purchased 1 million worth of mortgage-backed ... (Read 61 times)

Mimi

  • Hero Member
  • *****
  • Posts: 542
on: Jun 30, 2018
Assuming a required reserve ratio of 10 and the Fed purchased 1 million worth of mortgage-backed securities, make use of the simple deposit multiplier to determine how much checking deposits would change.
 
  A) increase by 1 million
  B) increase by 10 million
  C) decrease by 1 million
  D) decrease by 10 million

Question 2

What impact do savings rates in Belgium have on the real interest rate that businesses in Belgium must pay to obtain the funds to finance their spending on plant and equipment?
 
  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

djpooyouma

  • Sr. Member
  • ****
  • Posts: 325
Reply #1 on: Jun 30, 2018
Answer to Question 1

A

Answer to Question 2

Because Belgium is a small open economy, the domestic real interest rate will equal the world real interest rate. Because domestic saving in Belgium has no effect on the world real interest rate, the savings rate in Belgium has no impact on the real interest rate at which businesses in Belgium are able to borrow funds.


Mimi

  • Member
  • Posts: 542
Reply 2 on: Jun 30, 2018
Great answer, keep it coming :)

ricroger

  • Member
  • Posts: 352
Reply 3 on: Yesterday
Thanks for the timely response, appreciate it

« previous next »
 

Did you know?

As many as 28% of hospitalized patients requiring mechanical ventilators to help them breathe (for more than 48 hours) will develop ventilator-associated pneumonia. Current therapy involves intravenous antibiotics, but new antibiotics that can be inhaled (and more directly treat the infection) are being developed.

Did you know?

After 5 years of being diagnosed with rheumatoid arthritis, one every three patients will no longer be able to work.

Did you know?

Vampire bats have a natural anticoagulant in their saliva that permits continuous bleeding after they painlessly open a wound with their incisors. This capillary blood does not cause any significant blood loss to their victims.

Did you know?

Urine turns bright yellow if larger than normal amounts of certain substances are consumed; one of these substances is asparagus.

Did you know?

Adolescents often feel clumsy during puberty because during this time of development, their hands and feet grow faster than their arms and legs do. The body is therefore out of proportion. One out of five adolescents actually experiences growing pains during this period.

Mars's average distance from the Sun is roughly 230 million km (1.5 AU) and its orbital period Mars's average distance from the Sun is roughly 230 million km (1.5 AU) and its orbital period
(a) The connection required to test a Halleffect sensor. (b) A typical waveform from a Hall-effect ... (a) The connection required to test a Halleffect sensor. (b) A typical waveform from a Hall-effect ...
Distribution of Thunderstorms: Approximately 14.5 million thunderstorms occur each year across the ... Distribution of Thunderstorms: Approximately 14.5 million thunderstorms occur each year across the ...
Chelsea Donahue has a​ 20-year home mortgage of ​78,000 at​ 7.50% interest and will pay ... Chelsea Donahue has a​ 20-year home mortgage of ​78,000 at​ 7.50% interest and will pay ...
In 2000, the average charge of tax preparation was 95 . Assuming a normal distribution and a ... In 2000, the average charge of tax preparation was 95 . Assuming a normal distribution and a ...
Cyanobacteria from 850 million years ago (Photo 2) Cyanobacteria from 850 million years ago (Photo 2)
Video: TRH/TSH/Thyroid hormone

For a complete list of videos, visit our video library