3 economics qustions

profileaa.2015

hi there are economics short questions

  1. Remembering that currency in a bank’s vault is not considered part of the money supply, describe why a consumer depositing $1000 in currency (part of M1) in a bank account and receiving a demand deposit (also part of M1) in the amount of $1000 in exchange does not change the money supply (M1).
  2. Assuming the reserve ratio is 10%, how much of the $1000 deposit must the bank keep in reserves?  How much can it loan out?
  3. Suppose the Federal Reserve sells a bond for $1000.  The money goes from ___________ (the Fed or the public’s hands) to _____________ (the Fed or the public’s hands) and the amount of currency in the public’s hands __________ (decreases or increases)

there is a powerpoint in the attachnment

i need it in 2 hours

thanks 

 

  • 11 years ago
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