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

Author Question: A bank has reserves of 50, deposits of 100, loans of 20, and government securities of 30. Assume the ... (Read 27 times)

jilianpiloj

  • Hero Member
  • *****
  • Posts: 521
on: Jun 29, 2018
A bank has reserves of 50, deposits of 100, loans of 20, and government securities of 30. Assume the desired reserve ratio is 20 percent.
 
  a. What are the bank's assets and what are its liabilities?
  b. How much does the bank have in excess reserves?
  c. What can the bank do with its excess reserves that will affect the quantity of money?

Question 2

The above table has data on the consumption function in the nation of Mojo.
 
  a. What is the amount of autonomous consumption expenditure?
  b. What is the marginal propensity to consume?


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

ricroger

  • Sr. Member
  • ****
  • Posts: 352
Reply #1 on: Jun 29, 2018
Answer to Question 1

a. Assets are reserves, loans, and securities. Liabilities are deposits.
b. The excess reserves are 30, equal to the actual reserves of 50 minus the desired reserves of 20 (= 20 percent of 100 of deposits).
c. The bank can use its excess reserves to make loans. When it makes the loan, it will increase the quantity of money.

Answer to Question 2

a. Autonomous consumption expenditure equals the consumption expenditure when disposable income is 0, so autonomous consumption expenditure is 0.8 trillion.
b. The marginal propensity to consume equals 0.80.


jilianpiloj

  • Member
  • Posts: 521
Reply 2 on: Jun 29, 2018
Wow, this really help

komodo7

  • Member
  • Posts: 322
Reply 3 on: Yesterday
:D TYSM

« previous next »
 

Did you know?

Hippocrates noted that blood separates into four differently colored liquids when removed from the body and examined: a pure red liquid mixed with white liquid material with a yellow-colored froth at the top and a black substance that settles underneath; he named these the four humors (for blood, phlegm, yellow bile, and black bile).

Did you know?

According to research, pregnant women tend to eat more if carrying a baby boy. Male fetuses may secrete a chemical that stimulates their mothers to step up her energy intake.

Did you know?

Multiple sclerosis is a condition wherein the body's nervous system is weakened by an autoimmune reaction that attacks the myelin sheaths of neurons.

Did you know?

To combat osteoporosis, changes in lifestyle and diet are recommended. At-risk patients should include 1,200 to 1,500 mg of calcium daily either via dietary means or with supplements.

Did you know?

Computer programs are available that crosscheck a new drug's possible trade name with all other trade names currently available. These programs detect dangerous similarities between names and alert the manufacturer of the drug.

World coal reserves in gigatonnes World coal reserves in gigatonnes
Figure 7.1 shows the rapid decline in the trust of Americans in government since the 1960s. This de Figure 7.1 shows the rapid decline in the trust of Americans in government since the 1960s. This de
Example of Reconciling a Bank Statement Cont. Example of Reconciling a Bank Statement Cont.
Government Corruption versus GDP per Capita, 2009 Government Corruption versus GDP per Capita, 2009
Government By the People, 2016 Presidential Election, 26th Edition Government By the People, 2016 Presidential Election, 26th Edition
A bank statement shows a balance of $2,970.31 The check register of the account owner shows an ... A bank statement shows a balance of $2,970.31 The check register of the account owner shows an ...
Video: Calvin cycle (The light-independent reactions )

For a complete list of videos, visit our video library