Chapter 10 Homework - Sp23 EC X Question 16 - Chapter 10 Homev X + O https://ezto.mheducation.com/ext/ma... A . . . apter 10 Homework i Submitted 131/160 Total points awarded Help Exit The central bank of the fictitious country "Alpha" raises bank reserves by $100. 16 What effect will the increase in bank reserves have on the money supply in each of the following situations: a. If the banking system is a 100% reserve banking system, the money supply will increase by $ 100 s awarded b. If the banking system is a fractional reserve banking system with a desired scored reserve deposit ratio of 0.4, the money supply will increase by $| 400 . Book Print erences Homework i Submitted 131/160 Total points awarded Help Exit 30s 0:00 / 2:02 1x cc ed Which of the following conclusions is implied by the fact that banks charge for wire transfers but not for funds deposited by check? O Wire transfer fees are mandated by banking regulations. Banks face a perfectly elastic demand curve for each of their services. * Customers who use checks shop more carefully than those who transfer funds by wire. O Banks are not perfectly competitive. Prev 1 of 16 Next >Homework i Submitted 31/160 Total points awarded Help Exit 30s 0:00 / 3:00 1x CC What is NOT a common use of money? A medium of exchange-for example, people use money to buy and sell things. A high-return asset-for example, people can hold money to increase their net worth. O A unit of account-for example, people measure the value of things in money. A store of value-for example, people can hold some of their saving in cash. x Course Sch( X ma Yuzu Reade X y! mcgraw-hil x Question 1 X + C https://ezto.mheducation.com/e... A> > Yo . . . Chapter 10 Homework i Submitted 131/160 Total points awarded Help Exit b. The initial money supply is $1,500, of which $700 is currency held by the public. The desired reserve-deposit ratio is 0.1. Calculate the increase in the 11 money supply associated with increases in bank reserves of $20. What is the money multiplier in this economy? Assume that individuals do not change their currency holdings. Instructions: Enter your responses as whole numbers. 6/10 points awarded Increase in bank Increase in money reserves supply Scored $ 20 20 eBook Money multiplier: O Print c. A general rule for calculating the money multiplier is: References 1/desired reserve. 1/deposit ratio. O 1/(deposit ratio-desired reserve) 1/(desired reserve-deposit ratio). Mc Graw Hill