Student Solution

-->

"Education is the most powerful weapon which you can use to change the world”
– Nelson Mandela

1 University

1 Course

2 Subjects

Download Solution

Related Solution

Module 8 Discussion_...
Over the past eight weeks, this course has exposed me to various concepts surrounding change. I have learned more about leadership, particularly in an organization. The course package is very rich and...

Module 8 Discussion
Module 8 Discussion

Over the past eight weeks, this course has exposed

Week 1 Weekly Summar...
This week was very interesting for me. I learned many new things from this week. I know the definition of economics which help us to determine how society distributes its scarce resources. I learned t...

Week 1 Weekly Summary
Week 1 Weekly Summary

This week was very interesting for me. I learned m

Essay Critique Paper...
I chose the Dallas Museum of art to visit however, I forgot to bring my mobile or camera with me so I could not take any picture. I asked my friend to come with me but he had some personal works to do...

Essay Critique Paper
Essay Critique Paper

I chose the Dallas Museum of art to visit however,

Unit 5 Written Assignment Solution

Unit 5 Written Assignment Solution

Q SHORT ANSWER. Write the word or phrase that best completes each statement or answers the question. 1) Suppose that the required reserve ratio is 10 percent and you withdraw $25,000 from Comerica Bank. What is the deposit multiplier? What is the total decrease in deposits in the banking system? What is the change in the money supply? 1) _____________

View Related Questions

Solution Preview

View Complete Solution
1) The simple deposit multiplier is equal to (1/required reserve ratio). In this case it is 1/0.1 = 10. Since the deposit multiplier is 10, then a decrease in deposits in the banking system is equal to the multiplier times the initial withdrawal. The change in deposits will be negative as the withdrawal will shrink deposits in the banking system. This is 10 × -$25,000 = -$250,000. To find the change in the money supply,