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We derived the modified money multiplier as a function of (C/D) and (E/D) as m = M/B = (C+D)/(C+E) = (C/D + 1)/(C/D + E/D). This expression assumes no reserve requirement and all reserve balances are excess reserves. (a) Assume that the currency to deposit ratio is 0.10 and the excess reserves to deposit ratio is 0.15. Find the money multiplier. (b) Assume that the monetary base is $5 trillion. Find the money supply in trillion dollars. (c) Find the amount of (excess) reserves in trillion dollars . (d) Excess reserves to deposit ratio decreases to 0.12 as a result of decreased reserves (i.e., the amount of deposits do not change). As a result the monetary base decreases. If Fed wants to restore the monetary base at the original value, Fed should ___________ (buy/sell) treasury bills worth $ _______ trillion. Money multiplier (value) : Money supply in trillion dollars: The amount of (excess) reserves in trillion dollars: Fed should (buy or sell) treasury bills worth $ trillion.

Answer The money multiplier is a measure of the amount of money a bank can create from a given amount of reserves within the fractional reserve banking system. In this case, the modified money multiplier is a function of the

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The balance sheet of Jaguar Bank of Indianapolis (JBI) on January 2, 2023 is given below. All numbers are in dollars. Assets Liabilities and net worth Cash 120 Checkable deposits 500 Reserves at Fed 50 Savings deposits 750 Excess reserves 150 Time deposits 600 T-bills 280 Loans 1400 Equity 150 Total 2000 Total 2000 A customer defaults a $400 loan. The collateral compensates for $349 of the loss. JBI still complies with the US requirement of minimum equity ratio (True/False).

Answer True. The minimum equity ratio is calculated by taking the Equity and dividing it by the Total Assets. In this case, the Equity is $150 and the Total Assets is $2000, giving an equity ratio of 0.075, which is

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The balance sheet of Jaguar Bank of Indianapolis (JBI) on January 2, 2020 is given below. All numbers are in dollars. There were no mandatory reserve requirements on balances in savings and time deposits. Assets Liabilities and net worth Cash 120 Checkable deposits 500 Required reserves 50 Savings deposits 750 Excess reserves 150 Time deposits 600 T-bills 280 Loans 1400 Equity 150 Total 2000 Total 2000 Fed changes the required reserve ratio to 0% in response to Covid-19. The maximum Checkable deposit outflow JBI can sustain without altering its balance sheet (not selling any loans or bonds and only using primary reserves) is

Answer: Balance Sheet of Jaguar Bank of Indianapolis (JBI) on January 2, 2020 The balance sheet of Jaguar Bank of Indianapolis (JBI) on January 2, 2020 is given below. All numbers are in dollars. There were no mandatory reserve requirements

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The balance sheet of Jaguar Bank of Indianapolis (JBI) on January 2, 2020 is given below. All numbers are in dollars. Required reserve ratio was 10% of checkable deposits. There were no mandatory reserve requirements on balances in savings and time deposits. Assets Liabilities and net worth Cash 120 Checkable deposits 500 Required reserves 50 Savings deposits 750 Excess reserves 150 Time deposits 600 T-bills 280 Loans 1400 Equity 150 Total 2000 Total 2000 The maximum Checkable deposit outflow JBI can sustain without altering its balance sheet (not selling any loans or bonds and only using primary reserves) is

Answer: Maximum Checkable Deposit Outflow The maximum checkable deposit outflow that Jaguar Bank of Indianapolis (JBI) can sustain without altering its balance sheet on January 2, 2020 is $50. This is determined by the required reserve ratio of 10% of

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For a personal investment of $50,000. invested in a GIC (Guaranteed Investment Certificate) for 5 years at 4% interest rate per year (compounded annually), what do you expect to collect (principle plus interest) at the end of 5-th year (first day of the 6th year)?

Answer: Calculating Returns on a GIC Investment with a 4% Interest Rate A GIC (Guaranteed Investment Certificate) is a type of investment that provides a guaranteed rate of return, and can be used to help diversify or grow your savings.

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Brooke just bought sets of solar panels to power the ventilation and heating in four of her 3000 ft2 greenhouses. The panels cost $12,000 today and will reduce her electricity bills by average of $300 per month (average of four seasons). How long, in months, will it take her to recoup her investment in the panels if she can earn 6% interest, compounded monthly, on her money? (Hint: You can use series present worth factor

Answer: Financial Analysis: How long will it take Brooke to Recoup Solar Panel Investment? Brooke has just purchased four sets of solar panels to power the ventilation and heating in her 3000 ft2 greenhouses. The total cost of the solar

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Brooke just bought sets of solar panels to power the ventilation and heating in four of her 3000 ft2 greenhouses. The panels cost $12,000 today and will reduce her electricity bills by average of $300 per month (average of four seasons). How long, in months, will it take her to recoup her investment in the panels if she can earn 6% interest, compounded monthly, on her money? (Hint: You can use series present worth calculator

Answer The answer to the question is that it will take Brooke 40 months to recoup her investment in the solar panels. This calculation is based on the information given in the question that the panels cost $12,000 today and

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Brooke just bought sets of solar panels to power the ventilation and heating in four of her 3000 ft2 greenhouses. The panels cost $12,000 today and will reduce her electricity bills by average of $300 per month (average of four seasons). How long, in months, will it take her to recoup her investment in the panels if she can earn 6% interest, compounded monthly, on her money? (Hint: You can use linear interpolation!)

Answer Brooke will be able to recoup her investment in solar panels in 43 months. This is calculated using the Present Value of an Annuity formula: PV = PMT (1 – (1 + i)-n / i) where PV is the

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Brooke just bought sets of solar panels to power the ventilation and heating in four of her 3000 ft2 greenhouses. The panels cost $12,000 today and will reduce her electricity bills by average of $300 per month (average of four seasons). How long, in months, will it take her to recoup her investment in the panels if she can earn 6% interest, compounded monthly, on her money? (Hint: You can use either the Capital Recovery Factor formula or the Series Present Worth Factor formula, or you can use linear interpolation!)

Answer: It will take Brooke approximately 48 months to recoup her investment in the solar panels. This is calculated by using either the Capital Recovery Factor formula or the Series Present Worth Factor formula, or by using linear interpolation. Capital

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Brooke just bought sets of solar panels to power the ventilation and heating in four of her 3000 ft2 greenhouses. The panels cost $12,000 today and will reduce her electricity bills by average of $300 per month (average of four seasons). How long will it take her to recoup her investment in the panels if she can earn 6% interest, compounded monthly, on her money? (Hint: You can use either the Capital Recovery Factor formula or the Series Present Worth Factor formula, or you can use linear interpolation!)

Answer: Brooke will be able to recoup her investment of $12,000 for the solar panels in about 28 years. This can be calculated by using the Capital Recovery Factor formula, the Series Present Worth Factor formula, or linear interpolation. Capital

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The balance sheet of Jaguar Bank of Indianapolis (JBI) on January 2, 2020 is given below. All numbers are in dollars. Required reserve ratio was 10% of checkable deposits. There were no mandatory reserve requirements on balances in savings and time deposits. Assets Liabilities and net worth Cash 120 Checkable deposits 500 Required reserves 50 Savings deposits 750 Excess reserves 150 Time deposits 600 T-bills 280 Loans 1400 Equity 150 Total 2000 Total 2000 The maximum Checkable deposit outflow JBI can sustain without altering its balance sheet (not selling any loans or bonds and only using primary reserves) is

Answer: Maximum Checkable Deposit Outflow JBI Can Sustain The maximum Checkable deposit outflow JBI can sustain without altering its balance sheet (not selling any loans or bonds and only using primary reserves) is $500. This is calculated based on the

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The balance sheet of Jaguar Bank of Indianapolis (JBI) on January 2, 2023 is given below. All numbers are in dollars. Assets Liabilities and net worth Cash 130 Checkable deposits 500 Reserves at Fed 190 Savings deposits 750 T-bills 280 Time deposits *** Loans 1400 Equity 150 Total *** Total *** Primary reserves of JBI is

Answer: The Balance Sheet of Jaguar Bank of Indianapolis (JBI) as of January 2, 2023 The balance sheet of Jaguar Bank of Indianapolis (JBI) on January 2, 2023 is given below. All numbers are in dollars. The total assets and

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The balance sheet of Jaguar Bank of Indianapolis (JBI) on January 2, 2023 is given below. All numbers are in dollars. Assets Liabilities and net worth Cash 120 Checkable deposits 500 Reserves at Fed 50 Savings deposits 720 Excess reserves 150 Time deposits 600 T-bills 280 Loans 1380 Equity *** Total *** *** The equity ratio (2 decimal points) is ____ %.

Answer: Equity Ratio of Jaguar Bank of Indianapolis (JBI) The equity ratio is a measure of a company’s financial leverage, calculated by taking the total equity of a company and dividing it by the total assets. The equity ratio of

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Consider an economy which produces a consumption good using capital and human capital according to the following production function: 𝑌𝑡=𝑧𝐻𝑡^𝛼 Where 𝑌𝑡 is output, z is a productivity parameter, 𝐻𝑡 is the stock of human capital and 0<𝛼<1 is a technology parameter. We assume that the labour force is constant (no population growth). The human capital production technology is similar to that of the consumption good so that one unit of consumption good can be transformed effortlessly into one unit of human capital. Human capital evolve according to: 𝐻𝑡+1=𝑠𝐻𝑌𝑡+(1−𝑑)𝐻𝑡 Where 𝑑 is the depreciation rate of human capital and 𝑠𝐻 is the fraction of income invested in human capital. a) Is this economy growing in the long-run? b) Assume the government implements a policy which raises permanently the share of income invested in human capital 𝑠𝐻. What is the effect of this policy on the level of output and on its growth rate in the long-run?

Answer: Overview This economy produces a consumption good using capital and human capital according to a production function. The human capital evolves according to a given equation. This question considers the long-run effects of a policy that permanently raises the

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proofread balance sheet

Proofreading a Balance Sheet Proofreading a balance sheet is an important part of financial management. It involves carefully checking for accuracy and completeness, and ensuring that all figures are in the correct format. To ensure that a balance sheet is

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A house allocates its $2000 monthly income to the purchase of three goods. Prices 0f these goods are $30, $40, and $20 per unit. (a) Write the household monthly budget constraint. (b) If this household purchases 40 units of goods three each month, write its budget equation and graph it. What is the slope of the budget line?

Answer: Household Budget Constraint A household’s budget constraint is the sum of the prices of all goods and services that it purchases per month. In this case, the household’s monthly budget constraint is given by the equation: $30x + $40y

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A political news anchor argues that the government should impose a tariff on microprocessors because they are a necessary input into the production of various weapons. Free trade, she contends, would make the United States overly dependent on foreign countries for the supply of microprocessors and thus, in case of war, unable to make enough weapons to defend itself. Which of the following justifications is the news anchor using to support their argument in favor of the trade restriction on microprocessors? Jobs argument National-security argument Using-protection-as-a-bargaining-chip argument Unfair-competition argument Infant-industry argument

Answer: Summary The news anchor is using a national-security argument to justify their argument in favor of a tariff on microprocessors, claiming that free trade would make the US overly dependent on foreign countries for the supply of microprocessors and

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PARTICULARS DEBIT (R.S) CREDIT (R.S) Cash in hand 1,080 Cash in bank 5,260 Purchases/Sales 81,350 1,97,560 Returns 1,360 1,000 Wages 20,960 Fuel and Power 9,460 Carriage on Sales 6,400 Carriage on Purchases 4,080 Stock (1.4.2011) 11,520 Building 60,000 Freehold Land 20,000 Machinery 40,000 Salaries 30,000 Patents 15,000 General Expenses 6,000 Insurance 1,200 Drawings/Capital 10,490 1,42,000 Sundry Debtors/Creditors 29,000 12,600 3,53,160 3,53,160 Prepare Trading and Profit and Loss Account for year ended on 31 March 2015.

Answer: Preparing a Trading and Profit and Loss Account for a Year Ended on 31 March 2015 A Trading and Profit and Loss Account is a financial statement that reflects a company’s profits or losses over a certain period of

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