Suppose you have $10,000 in your checking account. You withdraw $500 cash from your account and hide it under your pillow for future use. If the required reserve ratio is 10%, what will be the maximum impact on money supply today as a result of your action?

Answers

Answer 1

Answer:

The Money supply will decrease by $4,500

Explanation:

What will be the maximum impact on money supply today as a result of your action is that the Money supply will decrease by $4,500.

Since we assumed that you have $10,000 in your account in which you withdraw $500 cash from your account and hide it under your pillow for future use, therefore based this scenario or actions carried by you it means that your bank have fewer or lesser funds available to make loans which means the decrease will tend to affect the money supply.

Hence, you can easily calculate the effect by using the simple money multiplier.

Related Questions

Newark Company has provided the following information: Cash sales, $500,000 Credit sales, $1,400,000 Selling and administrative expenses, $380,000 Sales returns and allowances, $95,000 Gross profit, $1,410,000 Increase in accounts receivable, $60,000 Bad debt expense, $38,000 Sales discounts, $48,000 Net income, $1,030,000 How much cash was collected from customers
Traditionally, the music industry signed multi-year contracts with artists and sold copyright-protected music through established distribution channels. A shift to the digital format and the rise of Internet technology have resulted in the sharing of music over peer-to-peer networks, a practice the industry calls "piracy." In recent years, the music industry has seen a rapid decline in the number of CDs sold. At the same time, the ownership of the distribution rights of musical content under copyright laws remains clear. Attempts at innovation by individual record labels to offer music as direct downloads to consumer are quickly copied by other labels. Based on these factors, the best assessment is that the music industry has shifted from a __________ to a __________ cycle market.a) slow; fastb) slow; standardc) standard; slowd) standard; fast
A company holds $40,000 of 7% bonds as a held-to-maturity security. Assuming all prior interest entries have been accounted for, the bondholder's journal entry to record receipt of the semiannual interest payment includes a debit to Cash for $2,800 and a credit to Interest Revenue for $2,800. True False
According to the Coase theorem, in the presence of externalities a private parties can bargain to reach an efficient outcome. b government assistance is necessary to reach an efficient outcome. c the initial distribution of property rights will determine the efficient outcome. d the assignment of legal rights can prevent externalities.
The per-unit standards for direct labor are 2 direct labor hours at $15 per hour. If in producing 1800 units, the actual direct labor cost was $48000 for 3000 direct labor hours worked, the total direct labor variance is: a. $6000 unfavorable. b. $1800 unfavorable. c. $3750 unfavorable. d. $6000 favorable.

Rouge Company’s $250,000 net income for the quarter ended September 30 included the following after-tax items:A $20,000 cumulative effect loss resulting from a change in inventory valuation method made on September 1.$0 of the $60,000 annual property taxes paid on February 1.For the quarter ended September 30, the amount of net income that Rouge should report is:_______.a. $235,000.b. $250,000.c. $255,000.d. $270,000.

Answers

Answer:

c. $255,000

Explanation:

Rouge should report the following income for this quarter = $250,000 (net income) + $20,000 (cumulative effect loss) - $15,000 (25% of annual property taxes) = $255,000

Cumulative effects on inventory valuation occur when overstate or understate your inventory levels, which directly affects cost of goods sold and overall profits.

Bruce Corporation makes four products in a single facility. These products have the following unit product costs: Products ABCD Direct materials$13.20$9.10$9.90$9.50 Direct labor 18.30 26.30 32.50 39.30 Variable manufacturing overhead 3.20 1.60 1.50 2.10 Fixed manufacturing overhead 25.40 33.70 25.50 36.10 Unit product cost$60.10$70.70$69.40$87.00 Additional data concerning these products are listed below. Products ABCD Grinding minutes per unit 2.70 3.40 3.20 2.30 Selling price per unit$75.00$92.40$86.30$103.10 Variable selling cost per unit$1.10$0.10$2.20$0.50 Monthly demand in units 2,900 2,900 1,900 2,100 The grinding machines are potentially the constraint in the production facility. A total of 52,600 minutes are available per month on these machines. Direct labor is a variable cost in this company. How many minutes of grinding machine time would be required to satisfy demand for all four products

Answers

Answer:

A. Total grinding minutes required = 28,600 minutes

Of the 4, product D offers the highest profitability per grinding minute.

A. $40,020 divided by 7,830 minutes = $5.11 per grinding minute

B. $62,640 divided by 9,860 minutes = $6.35 per grinding minute

C. $27,930 divided by 6,080 minutes = $4.60 per grinding minute

D. $32,760 divided by 4,830/minutes = $6.70 per grinding minute

Explanation:

Bruce corporation

Step 1 identify Grinding minutes per unit of product

A = 2.70

B = 3.40

C = 3.20

D = 2.30

Step 2. Identify Production units through monthly demand units

A = 2,900

B = 2,900

C = 1,900

D = 2,100

Step 3. Determine total grinding units required to fulfill demand.

A = 2,900 x 2.70 = 7,830

B = 2,900 x 3.40 = 9,860

C = 1,900 x 3.20 = 6,080

D = 2,100 x 2.30 = 4,830

Total grinding minutes required = 28,600

Product profitability

Step 1. Determine product cost

Differentiate the product Costs and variable selling costs per unit from the unit selling prices.

A = 75.00 - 60.10 - 1.1 = 13.80

B = 92.40 - 70.70 - 0.1 = 21.60

C = 86.30 - 69.40 - 2.20 = 14.70

D = 103.10 - 87.00 - 0.50 = 15.60

Step 2. Multiply the profitability per unit with volume demanded to determine absolute value of profits made

A = 2,900 x 13.80 = $40,020

B = 2,900 x 21.60 = $62,640

C = 1,900 x 14.70 = $27,930

D = 2,100 x 15.60 = $32,760

Total profit = $163,350.

Step 3./determine the profit per grinding minute. To evaluate which product makes best use of the grinding machine

A. $40,020 divided by 7,830 minutes = $5.11 per grinding minute

B. $62,640 divided by 9,860 minutes = $6/35 per grinding minute

C. $27,930 divided by 6,080 minutes = $4.60 per grinding minute

D. $32,760 divided by 4,830/minutes = $6.7 per grinding minute

Evaluating strategies LO C2 If the company raises its selling price to $240 per unit. 1. Compute Hudson Co.'s contribution margin per unit. 2. Compute Hudson Co.'s contribution margin ratio. 3. Compute Hudson Co.'s break-even point in units. 4. Compute Hudson Co.'s break-even point in sales dollars.

Answers

Answer:

Instructions are below.

Explanation:

We weren't provided with enough information to answer the requirements. But, I will provide the formulas.

1) Contribution margin:

CM= selling price - unitary variable cost

2) contribution margin ratio:

contribution margin ratio= contribution margin / selling price

3) break-even point in units

Break-even point in units= fixed costs/ contribution margin per unit

4) break-even point in sales dollars:

Break-even point (dollars)= fixed costs/ contribution margin ratio

Sam bought 100 shares of common stock on company A at the price of $40.97 per share on June 1. Since then Sam has closely watched the monthly prices for company A: $45.19 on July 1, $49.75 on August 1 and $51.58 on September 1 of the same year. company A doesn’t pay any dividend. Based on the stock performance over these three months, what is the standard deviation for monthly returns on company A?A. 10.50%
B. 10.09%
C. 3.68%
D. 3.76%

Answers

The standard deviation for monthly returns on company A is approximately 8.03%

What is the standard deviation for monthly returns on company A

To calculate the standard deviation of monthly returns, we need to first calculate the monthly returns for the three months of observation. We can do this by using the formula:

Monthly Return = (Current Price - Purchase Price) / Purchase Price

For July 1:

Monthly Return = ($45.19 - $40.97) / $40.97 = 0.103 or 10.3%

For August 1:

Monthly Return = ($49.75 - $40.97) / $40.97 = 0.2143 or 21.43%

For September 1:

Monthly Return = ($51.58 - $40.97) / $40.97 = 0.2589 or 25.89%

Next, we need to calculate the average monthly return (R) over the three months:

R = (10.3% + 21.43% + 25.89%) / 3 = 19.2%

Now, we can calculate the standard deviation (σ) of the monthly returns using the formula:

σ = √ [(Σ (Ri - R)^2) / (n - 1)]

where Ri is the return for the ith month, and n is the number of observations (in this case, n = 3).

Plugging in the values, we get:

σ = √[((10.3% - 19.2%)^2 + (21.43% - 19.2%)^2 + (25.89% - 19.2%)^2) / (3 - 1)]

= √[(94.86 + 3.62 + 35.37) / 2]

= √[(133.85) / 2]

= 8.03%

Learn more on standard deviation here;

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Examples of physical capital include _______________________. Examples of human capital include ______________________________.A) knowledge one picks up through education and training; factories and computers
B) machines and factories; chairs and desks
C) knowledge one picks up through education and experience; factories and machines
D) machines and factories; knowledge one picks up through education and training

Answers

Answer:

D) machines and factories; knowledge one picks up through education and training

Explanation:

The physical capital is the capital that has the physical existence i.e. tangible. It could be seen, feel, or even touched. examples like plant, machinery etc

While on the other hand the human capital is intangible it only effects the production and the operations

Like - skills, knowledge, experience of a worker

Therefore the option D is correct

Hi this is a macroeconomics problem that i'm struggling with! if someone could please help me i'd really appreciate it!The Red Cross and WIC (Women Infants Children program) both provide emergency food packages and first-aid kits to New York City homeless shelters. The table below shows their weekly production possibilities in providing emergency goods to NYC homeless shelters.

Red Cross WIC
Food packages 300 or 0 200 or 0
First-aid kits 0 50 0 20
NYC homeless shelters need a total of 20 first-aid kits per week. Currently, they get 10 kits from the Red Cross and 10 kits from WIC. With their remaining resources, how many food packages can each organization provide to NYC homeless shelters?

Answers

Red Cross can provide at most 300 food packages and Women Infants Children program can provide at most 200 food packages. If the NYC homeless shelters need 200 food packages per week, Red Cross can provide 100 food packages and WIC can provide the same number of 100 food packages, in total, 200 food packages.

Other Questions

Logan Corporation issued $800,000 of 8% bonds on October 1, 2006, due on October 1, 2011. The interest is to be paid twice a year on April 1 and October 1. The bonds were sold to yield 10% effective annual interest. Logan Corporation closes its books annually on December 31. Instructions (a) Prepare the amortization schedule (effective interest method) through October 1, 2007. (b) Prepare the adjusting entry for December 31, 2007. Use the effective-interest method. (c) Compute the interest expense to be reported in the income statement for the year ended December 31, 2007.

SCHMIDT MACHINERY COMPANY Standard Cost Sheet Product: XV-1 Descriptions Quantity Cost Rate Subtotal Total Direct materials Aluminum 4 pounds $25/pound $100 PVC 1 pound 40/pound 40 Direct labor 5 hours 40/hour 200Variable factory overhead 5 hours 12/hour 60Total variable manufacturing cost $400Fixed factory overhead 5 hours 24/hour 120 120Standard manufacturing cost per unit $520Standard variable selling and administrative cost per unit I pound 50 * Budgeted fixed factory overhead cost = $120,000 Assume that Schmidt Machinery Company had the standard costs reflected in Exhibit 14.5. In a given month, the company used 3,470 pounds of aluminum to manufacture 935 units. The company paid $28.90 per pound during the month to purchase aluminum. At the beginning of the month, the company had 54 pounds of aluminum on hand. At the end of the month, the company had only 34 pounds of aluminum in its warehouse. Schmidt used 4,400 direct labor hours during the month, at an average cost of $41.90 per hour. Required: Compute for the month the following variances: 1. The purchase-price variance for aluminum. Indicate whether this variance is favorable (F) or unfavorable (U). 2. The usage variance for aluminum. Indicate whether this variance is favorable (F) or unfavorable (U). 3. The direct labor rate variance. Indicate whether this variance is favorable (F) or unfavorable (U). 4. The direct labor efficiency variance. Indicate whether this variance is favorable (F) or unfavorable (U).

Suppose that your demand schedule for dvds is as follows: price quantity demanded (income = $10,000) quantity demanded (income = $12,000) $8 40 dvds 50 dvds 10 32 45 12 24 30 14 16 20 16 8 12a. use the midpoint method to calculate your price elasticity of demand as the price of dvds increases from $8 to $10 if (i) your income is $10,000 and (ii) your income is $12,000. b. calculate your income elasticity of demand as your income increases from $10,000 to $12,000 if (i) the price is $12 and (ii) the price is $16.

holds huge reserves of oil. Assume that at the end of 2017, Amplify Petroleum's cost of oil reserves totaled $ 80 comma 000 comma 000, representing 100 comma 000 comma 000 barrels of oil. Suppose Amplify Petroleum removed and sold 20 comma 000 comma 000 barrels of oil during 2018. Journalize depletion expense for 2018.