20 Points a. at the end of 2012, accounts receivable were dollar 586.000 and the allowance account had a credit balance of dollar 50,000. accounts receivable activity for 2013 was as follows: the company's controller prepared the following aging summary of year-end accounts receivable: prepare a summary journal entry to record the monthly bad debt accrual and the write-offs during the year. (b) a graph of the demand function in part a. make sure to justify your answer. $0 B. If money demand is perfectly elastic, which of the following is likely to occur? Our experts can answer your tough homework and study questions. Option 2 is correct Money supply would increase by less $5 millions Explanation Increase in 1. b. an increase in the money supply of less than $5 million Increase in monetary base=$200 million Also assume that banks do not hold excess reserves and there is no cash held by the public. b. can't safely lend out more money. A) 100 million B) 160 million C) 6 million D) 60 million, The company has decided to put all its financial reports on its website to increase . with stakeholders If the Fed sells $1000 of US bonds to a commercial bank, we expect: A. What is the maximum amount of new loans the bank could lend with the given amounts of reserves? If the Fed requires a minimum reserve ratio of 8% and banks keep an additional 5% in excess reserves, what is the M1 money multiplier in this case? Show how the Fed would increase, Assume that the required reserve rate is ten percent, banks want to hold excess reserves in an amount that equals three percent of deposits, and the public withdraws ten percent of every deposit in cash. If the required reserve ratio is 0.05, what does the FED need to do, Assume that the banking system has total reserves of $575 billion. So now we can feel in this blank this is just 80,000,000 18 $1,000,000. Subordinated debt (5 years) B- purchase To expand the money supply, the Fed would want to exchange newly created money for securities from commercial banks. circulation. a. Option A is correct. $30,000 | Demand deposits According to the U. 3. B. B 2020 - 2024 www.quesba.com | All rights reserved. View this solution and millions of others when you join today! So the money multiplayer is five, so we can calculate that it needs to buy a certain amount of bonds, which means it needs so inject a certain number of money into the economy to make this multiplier works, and then in the end, it will have ah for, ah, 14,000,000 dollars off money supply. What is the simple money (deposit) multiplier?, A:Required reserve refers to the amount that banks or financial institution need to keep as cash or in, Q:Yesterday Bank A had no excess reserves. b. Formula of, Q:to calculate the money multiplier at each of the following values for the reserve requirement. The money multiplier is 1/0.2=5. If the Fed sells $1 million of government bonds, what is the effect on the economy s reserves and money supply? Do not copy from another source. C. (Increases or decreases for all.) Also assume that banks do not hold excess reserves and there is no cash held by the public. The required reserve ratio is 25%. B. Northland Bank plc has 600 million in deposits. Marwa deposits $1 million in cash into her checking account at First Bank. + 0.75? Assuming that the annualized expected rate of inflation over the life of the loan is 1 1?%, determine the nominal interest rate that the bank will charge you. What is the discount rate? All other trademarks and copyrights are the property of their respective owners. B. excess reserves of commercial banks will increase. 1% Call? The required reserve ratio is 25%. Bank hold $50 billion in reserves, so there are no excess reserves. A a. A. Total assets D Liabilities: Decrease by $200Required Reserves: Decrease by $30 a. \text{Depreciation Expense} & \$\hspace{10pt}8,000 & \text{Rent Expense} & \$\hspace{10pt}60,500\\ I need more information n order for me to Answer it. The Fed decides that it wants to expand the money supply by $40$ million.a. b. Would you expect the multiplier to be larger or smaller if banks decide to hold excess reserves? It faces a statutory liquidity ratio of 10%. Assume that the reserve requirement is 20 percent. Liabilities: Increase by $200Required Reserves: Increase by $170 Let reserves be the sum of required reserves (N) and excess reserves (E), R = N + E, where N = r. We calculate the money multiplier as 1/reserve requirement. Currently, the legal reserves that banks must hold equal 11.5 billion$. $100 Deposits If the Fed is using open-market operations, will it buy or sell bonds?b. Reserve requirement ratio (RRR) =4%, Q:there are no excess reserves. Monopolistic competition creates inefficiency because of the Price markups and excess capacity. Assume the required reserve ratio is 20 percent. If the Fed is using open-market operations, will it buy or sell bonds? That is five. Assume that the reserve requirement ratio is 20 percent. The 90 curves included in the graph are demand (D), marginal 80 revenue (MR), average total cost (ATC), and marginal cost ATC (MC). Also assume that, for every dollar held in currency, the public holds another $5 demand depo, The Fed purchases $200 worth of government bonds from the public. The Bank of Uchenna has the following balance sheet. $10,000 c. can safely lend out $50,000. Suppose that the required reserves ratio is 5%. If the Federal Reserve decreases its reserve requirement from 10% to 5%, t, Assume that the reserve requirement is 25 percent and that the amount of checkable deposits in Federal Bank is $200. Which of the following will most likely occur in the bank's balance sheet? Suppose the Federal Reserve conducts an open market purchase of $150 million government securities from the non-bank public. Show how the Fed would increase the money supply by $3 million through, Q:If the required reserve ratio (RRR) in the U.S. is 40 percent and Allen gathers $10,000 from cash, A:Required reserve ratio (RRR) refers to the percentage of the deposits with a bank that it is, Q:Bank A's total reserve (R) changed by increase the required reserve, A:The Fed generally chooses a counter-cyclical monetary policy to influence the market condition. Now suppose the, Suppose the banking system has $10 million in reserves, the reserve requirement is 20 percent, and there are no excess reserves. C. U.S. Treasury will have to borrow additional funds. Reserve requirement ratio= 12% or 0.12 Business loans to BB rated borrowers (100%) As a result, the money supply will: a. increase by $1 billion. If the central bank sells $10,000 worth of government securities to commercial banks, the total money supply will, Assume that the reserve requirement is 10 percent. A. If the Fed raises the reserve requirement, the money supply _____. A Find answers to questions asked by students like you. The reserve requirement is 20%. Money supply increases by $10 million, lowering the interest rat. B. decrease by $1.25 million. Assume also that required reserves are 25% and that banks do not hold any excess reserves and households hold no currency. DOD POODS Since excess reserves are zero, so total reserves are required reserves. Explain LIFO reserve and LIFO liquidation and their eff ects on financial statements and ratios. And millions of other answers 4U without ads. If the Fed raises the reserve requirement, the money supply _____. A:The formula is: $8,000 c. Increase the interest rate paid on ban, Suppose the reserve requirement is 10 percent. I was wrong. Assume that banks use all funds except required. What is M, the Money supply? Also assume the Federal Reserve conducts an Open Market Operations purchase of U.S. Treasury securities in the amoun, Suppose that the Fed undertakes an open market purchase of $25,000,000 worth of securities from a bank. Suppose the money supply (as measured by checkable deposits) is currently $900 billion. an increase in the money supply of less than $5 million, Assume that the reserve requirement is 20 percent. Also, assume that banks do not hold excess reserves and there is no cash held by the public. B- purchase Assume that the reserve requirement for demand deposits is 20 percent, that the banks hold no excess reserves, and that the public holds no currency. D-liquidity, Bank managers should always seek the highest returnpossible on their assets. Is this statement true, false, oruncertain? Property When the Fed buys government Securities in the open market (a) bank reserves increase (b) bank reserves decline (c) money supply increases but bank reserves remain unchanged (d) money supply declines but bank reserves remain unchanged. iii. c. leave banks' excess reserves unchanged. The federal reserve (''the fed'') wants to increase the money supply by $25 b, Suppose the reserve requirement is 10%. Yeah, because eight times five is 40. Correct answers: 1 question: The accompanying balance sheet is for the first federal bank. If the Fed is using open-market operations, will it buy or sell bonds? $50,000, Commercial banks can create money by If the Fed buys $4 million worth of government securities in an open market operation, then the money supply can: A. increase by $1.25 million. It. $70,000 The bank expects to earn an annual real interest rate equal to 3 3?%. $20,000 The Fed decides that it wants to expand the money supply by $40 million. the company uses the allowance method for its uncollectible accounts receivable. b. will initially see reserves increase by $400. *Response times may vary by subject and question complexity. Assume that the Fed has decided to increase reserves in the banking system by $200 billion. Liabilities: Increase by $200Required Reserves: Not change The Fed decides that it wants to expand the money supply by $40 million. Get access to millions of step-by-step textbook and homework solutions, Send experts your homework questions or start a chat with a tutor, Check for plagiarism and create citations in seconds, Get instant explanations to difficult math equations. each employee works in a single department, and each department is housed on a different floor. Create a chart showing five successive loans that could be made from this initial deposit. The Fed needs to buy an amount of bonds equals to the desired effect divided by the money multiplier. The money supply increases by $80. lending excess reserves to customers, The table gives the value of selected assets and liabilities of a commercial bank's T-account. an increase in the money supply of $5 million It sells $20 billion in U.S. securities. Required reserve ratio = 4.6% = 0.046 So buy bonds here. If someone deposits in a bank $5,000 that she had been hiding in her cookie jar, the largest possible increase in the money supply is $ . D-transparency. The accompanying balance sheet is for the first federal bank. a. E Required reserve ratio= 0.2 Suppose that the reserve requirement for checking deposits is 10 percent and that banks do not hold any excess reserves. Assume people hold no cash, the reserve requirement is 20 percent, and there are no excess reserves. When the Fed buys bonds in open-market operations, it _____ the money supply. $100,000 The required reserve ratio is the amount of reserves a bank is legally required to hold as a portion of its total deposits. If a bank initially has no excess reserves and $10,000 cash is deposited in the bank, the maximum amount by which this bank may increase its loans is What is the bank's return on assets. \text{Miscellaneous Expense} & 3,250 & \text{Utilities Expense} & 23,200 Please help i am giving away brainliest A banking system a. What is the size of the markup on the By creating an account, you agree to our terms & conditions, Download our mobile App for a better experience. Assume that all loans are deposited in checking accounts. maintaining a 100 percent reserve requirement $2,000. ABC bank has assets of 180 million and a a net income after taxes of $4 million; and bank capital of $14 million. E $10,000 $1.3 million. \text{Insurance Expense} & 1,500 & \text{Supplies Expense} & 2,750\\ d. both a and b, For a given increase in the supply of reserves to banks by the Fed, the drop in the federal funds rate (FFR) a) is larger the more sensitive to the FFR the demand for reserves (by banks) is. 15% Assume that Linda deposits in her checking account the $1,000 cash she was keeping at home for an emergency. So the fantasize that it wants to expand the money supply by $48,000,000. E transferring depositors' accounts at the Federal Reserve for conversion to cash Sample: 2A Score: 5 The student answers all parts of the question correctly and so earned all 5 points. The amount of loan that can be lent out by, Q:Considering that raising reserve requirements to 100% makes complete control of the money supply, A:The raising of reserve requirements to 100% is impossible or not practical and also it is not a, Q:suppose a commercial banking system has $300,000 of outstanding checkaable deposits and actual, Q:What are deposits and the money supply if the required that banks wish, A:We have given that public hold 0.15 proportion of deposit as cash and banks holds 0.08 of any rise, Q:You are given the following information: during the year, a monthly bad debt accrual is made by multiplying 3% times the amount of credit sales for the month. Calculate the dollar value of the reserves that the Bank of Uchenna is required to hold. So the answer to question B is that the government of, well, the fat needs to bye. Group of answer choices Sample: 2B Score: 3 The student received 1 point in part (a) for correctly calculating the reserve requirement as 10 percent, The, Assume that the banking system has total reserves of $\$$100 billion. Explain your reasoning. B Assume that the reserve requirement is 20 percent. b. Which set of ordered pairs represents y as a function of x? $20,000 Now: Suppose the Fed be, Using a required reserve ratio of 10%, and assuming that banks keep no excess reserves, imagine that $200 is deposited into a checking account. C If the Federal Reserve buys $5,000 worth of bonds, the largest possible increase in the money supply is $25,000 If someone deposits in a bank $5,000 that she had been hiding in her cookie jar, the largest possible increase in the money supply is $ All other things equal, if the Federal Reserve buys $5,000 worth of bonds, the money supply will . b. b. increase banks' excess reserves. Currency-to-deposits ratio (c) 0.20, A:(Since you have asked many questions, we will solve the first one for you. The graph depicts the situation $100 for a hypothetical monopolistically competitive firm. $1,285.70. Mrs. Quarantina's Cl Will do what ever it takes What is t. When reserve requirements are increased, the: A. excess reserves of commercial banks will decrease. At a federal funds rate = 4%, federal reserves will have a demand of $500. Assume the, To increase the money supply using the reserve requirements, what would the Fed typically do? A-liquidity W, Assume a required reserve ratio = 10%. Money supply would increase by less $5 millions. So then, at the end, this is go Oh! If the Fed lowers the required reserve ratio from 20 percent to 15 percent, checkable deposits (the money supply) will ultimately rise by how many mi, Assume the reserve requirement is 10%. copyright 2003-2023 Homework.Study.com. a. If the Fed is using open-market ope, Assume that the reserve requirement is 20 percent. reserve ratio is 50% and reserves are 5,000, A:The money multiplier is inversely related to the required reserve. Given the current reserves, calculate the maximum value of additional loans that the Bank of Uchenna can make. RR=0 then Multiplier is infinity. C. increase by $20 million. Assume that Elike raises $5,000 in cash from a yard sale and deposits the cash in his checking account at the Bank of Uchenna. E When the Fed sells bonds in open-market operations, it _____ the money supply. If the central bank sells $10,000 worth of government securities to commercial banks, the total money supply will A increase by $10,000 B increase by $50,000 C decrease by $10,000 D decrease by $50,000 E 10% calculate the amount of accounts receivable that would appear in the 2013 balance sheet? Circle the breakfast item that does not belong to the group. a. Part (c) asked students to identify how a bank with deficient reserves could meet its reserve requirements. b. This assumes that banks will not hold any excess reserves. Suppose the Federal Reserve engages in open-market operations. A:Invention of money helps to solve the drawback of the barter system. All other things being equal, will the money supply expand more if the Fed buys $2,000 worth of bonds or if someone deposits in a bank$2,000 . there are two types of employees: managers and engineers, and there are three departments: security, networking, and human resoures. Assume that the banking system is exactly meeting its reserve requirement, and the public wishes to hold no curr, Suppose there is a word in which there is no currency and depository institutions issue only transaction deposits and desire to hold no excess reserves. Increase the reserve requirement for banks. i. The U.S. money supply eventually increases by a. b. decrease by $1 billion. B The reserve requirement is 12.5 percent, people hold no currency, and the banking system keeps no excess reserves. a. Along with a copy of Find The greatest common Factor of 7, 15, 21 View a few ads and unblock the answer on the site. c. When the Fed decreases the interest rate it p, Suppose banks can voluntarily hold excess reserves (hold more reserves than their reserve requirement). a. decrease; decrease; decrease b. Assume that the reserve requirement is 20 percent. a. Also, suppose that the commercial banks are hoarding all excess reserves (not lending them out) because of t, Suppose the banking system does not hold excess reserves and the reserves ratio is 25%. To accomplish this? C A Assume that the reserve requirement is 20 percent. If the institution has excess reserves of $4,000, then what are its actual cash reserves? Suppose a bank has demand deposits of $100,000 and the legal reserve requirement is 20 percent. b. B. fewer reserves, thus decreasing the money mult, Assume that the reserve requirement is 20 percent and each bank holds only the required amount of reserves. C B Also assume that banks do not hold excess reserves and there is no cash held by the public. a) Banks will have a reserve deficiency and will look to sell assets or securities to raise cash (reserves). Using the degree and leading coefficient, find the function that has both branches If the Fed is using open-market operations, will it buy or sell bonds? Remember to use image search terms such as "mapa touristico" to get more authentic results. The money multiplier w, Assume that a bank has a reserve of $100,000, government securities of $200,000, loans of $700,000, and checkable deposits of $800,000. Suppose you take out a loan at your local bank. a. a. workers b. producers c. consumers d. the government, After four years aspen earned 510$ in simple interest from a cd into which she initially deposited $3000 what was the annual interest rate of the cd. Also assume that banks do not hold excess reserves and that the public does not hold any cash. c. Banks hold $270 billion in reserves, so there are no excess reserves. Also assume the Federal Reserve conducts an Open Market Operations purchase of U.S. Treasury securities in the amoun, Assume that the Federal Reserve establishes a minimum reserve requirement of 12 %. "Whenever currency is deposited in a commercial bank, cash goes out of If the reserve requirement is 25 percent, and banks keep no excess reserves, by how much will an increase in an initial inflow of $150 into the banking system increase the money supply? Also assume that banks do not hold excess reserves and there is no cash held by the public. Assets If the required reserve ratio is 0.2, by how much could the money supply expand if the Fed purchased $2 billion worth of bon, Suppose the banking system does not hold excess reserves and the reserve ratio is 20 %. Thus, the amount the Fed needs to buy is $40 million over 5 which is $8 million. Assume that the currency-deposit ratio is 0.5. What is this banks earnings-to-capital ratio and equity multiplier? A. b. The Fed wants to reduce the Money Supply. D $56,800,000 when the Fed purchased d. increase by $143 million. Why is this true that politics affect globalization? the monetary multiplier is Calculate the maximum change in demand deposits in the banking system as a whole resulting from Elikes deposit. Increase in currencydeposit ratio,, A:Money supply is the total money in an economy, which includes the currency in circulation, money, Q:Suppose that you take $150in currency out of your pocket and deposit it in your checking account., A:Reserve Ratio It is the minimum portion of deposit that must be held as reserve by the commercial, Q:If a bank uses $500 of excess reserves to make a new loan when the reserve ratio is 20 percent, what, A:If a bank uses $500 of excess reserves to make a new loan when the reserve ratio is 20 percent then. Use the theory of liquidity preference to illustrate in a graph the impact of this policy on the interest rate. This is maximum increase in money supply. Calculate the maximum change in demand deposits in the banking system as a whole resulting from Elikes deposit. Suppose the Federal Reserve sells $30 million worth of securities to a bank. The deposit will initially increase excess reserves at First Bank by, Assume that the reserve requirement is 15 percent and that a bank receives a new checking deposit of $200. Explain. The money supply decreases by $80. $25 C. $30 D. $80 E. $225, Suppose the banking system has $40 billion in reserves and there are no cash leakages or excess reserves. The money supply to fall by $20,000. If you want any specific, Q:Assume that the banking system is loaned up and that any open-market purchase by the Fed directly, A:Given; Calculate the dollar value of the reserves that the Bank of Uchenna is required to hold. If the Fed is using open-market ope; Assume that the reserve requirement is 20%. If the Fed is using open-market operations, Assume that the reserve requirement is 20%. their math grades C The Fed decides that it wants to expand the money supply by $40 million. The required reserve ratio is 16.7% (or 1/6), and the Federal Reserve buys $100,000 worth of government securities in the open market. b. Worth of government bonds purchased= $2 billion $10,000 Loans Also, assume that banks do not hold excess reserves and there is no cash held by the public. D. money supply will rise. Le petit djeuner The following account balances were taken from the adjusted trial balance for 333 Rivers Messenger Service, a delivery service firm, for the current fiscal year ended September 303030, 201020102010: DepreciationExpense$8,000RentExpense$60,500FeesEarned425,000SalariesExpense213,800InsuranceExpense1,500SuppliesExpense2,750MiscellaneousExpense3,250UtilitiesExpense23,200\begin{array}{lrlr} Money supply will increase by less than 5 millions. b. the public does not increase their level of currency holding. every employee has one badge. Okay, B um, what quantity of bonds does defend me to die or sail? Assume that the required reserve ratio is 10%; banks hold no excess reserves, and the public holds all money in the form of currency. By how much does the money supply immediately change as a result of Elikes deposit? If the reserve requirement is 20 percent, what is the maximum potential increase in the money supply, given the banks' reserve position, A critical assumption for the simple money multiplier (1/r) to hold is that: a. banks do not hold excess reserves. Assume that Elike raises $5,000 in cash from a yard sale and deposits . Get 5 free video unlocks on our app with code GOMOBILE. The Federal Reserve is in charge of setting the required reserve ratio for commercial banks in the US. Please subscribe to view the answer, Assume that the reserve requirement is 20 percent. (c) Using Name four elements of culture and briefly indicate why they are important when marketing products and services internationally. Assume that the banking system is exactly meeting its reserve requirement, and the public wishes to hold no curr. Assume that the reserve requirement is 20 percent. rising.? If you compare over two years, what would it reveal? Assume that the reserve requirement is 20 percent. The Fed decides that it wants to expand the money supply by $40 million. Assume also that required reserves are 10 percent of checking deposits and t. If the Fed is using open-market oper, Assume that the reserve requirement is 20%. 10, $1 tr. buying Treasury bills from the Federal Reserve Do not use a dollar sign. a decrease in the money supply of more than $5 million, B Liabilities: Increase by $200Required Reserves: Increase by $30 Required reserve ratio 3.5% = 3.5% of total deposit, Q:If the banks in this economy all hold 10% of the demand deposits as reserves, what is the money, A:The Reserve ratio is the minimum portion of the money that the commercial banks need to hold to meet, Q:Assume that the banking system has total reserves of Rs.150 billion. c. the required reserve ratio has to be larger than one. If the FED were to raise the interest rate it pays banks to hold reserves, you would expect that: a. excess reserves would drop and the money supply w, Suppose that there are no excess reserves in the banking system and the current amount of demand deposits is $100,000. Assume that the reserve requirement is 20 percent. an increase in the money supply of less than $5 million Assume that Atlantic National Bank has demand deposits of $100,000 and no excess reserves,and that the reserve requirement is 10 percent.A customer withdraws $5,000 from the bank.To meet the reserve requirement, the bank must increase its reserves by. (a) Calculate the dollar value of the, A:A demand deposit account (DDA) is a bank account from which deposited funds can be withdrawn at any, Q:Suppose that a $100 purchase of government bonds by the U.S. Federal Reserve causes a $200 increase, A:Federal reserve uses open market operations to change money supply. Consider the general demand function : Qa 3D 8,000 16? Assets 2. oeufs brouills, oeufs A new store is handing out small gifts to the customers who come in. If the reserve requirement is 20 percent, and banks keep no excess reserves, by how much will an increase in an initial inflow of $100 into the banking system increase the money supply? a) 0.25 b) 0, Assume that the banking system is loaned up and that any open-market purchase by the Fed directly increases reserves in the banks.
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