|Perfect Number of Pages to Order||5-10 Pages|
Q1: You deposit $500 in the banking system that you previously held as currency. The reserve ratio is equal to
a percentage of 20%
A) Multiply the amount by the money multiplier.
B) Will the overall amount of deposits in the banking system increase by how much?
C) How much will the money supply be increased?
Q2: A town has 152,000 employed people and 8000 unemployed persons at the start of 2018.
The remaining 40,000 residents of the community are unemployed.
According to these figures:
A) Determine the unemployment rate in your town:
B) Determine the labor force participation rate in the town:
C) Make a calculation Assume 10,000 persons opt to enter the workforce. Only 7,800 of the 10,000 persons find work. At the end of 2018, what was the unemployment rate?
Q3: Assume that First National Bank’s T-account is as follows:
The First National Bank is a financial institution based in the United States
Assets LiabilitiessReserves Deposits of $100,000 $500,000 Loans of $400,000
A) Based on the Fed’s requirement that banks retain 5% of deposits as reserves, how much surplus reserves does First National Bank now have?
B) Assume that all other banks merely have the required reserves on hand. How much would the economy’s money supply increase if First National decided to cut its reserves to merely the required amount?