Question 1: Monica saves $10,000 from her money market mutual fund and puts the fund into her savings account @ Bank of Alaska. What is the Immediate change in M1 and M2
Question 2: The commercial banks in zip have:
Reserve $ 250 million
Loans $ 3750 million
Deposits $ 4000 million
Total $ 4200 million
A. Construct the commercial bank's balance sheet.
- If you are missing any assets call them other asset's.
- If missing any liabilities call them other liabilities .
B. Calculate the bank reserve ratio.
C. If bank hold no excess reserves, calculate the deposit multiplier.
Question 3: Starting from unemploymnet equilibrium, briefly explain with the aid of the AS-AD model the short run on the price level and the real GDP of an open-market purchase. Does such an action help avoid Inflation? Does it increase real GDP in the long run?
Question 4: Banks in Japan make a bad loan that don't get repaid and several banks fail. The bank's customers lose their deposits.
A. What is the effect of the bank failures on the quantity of money.
B. What is the effect of bank failure on aggregate demand?
C. What are the effects of bank failure on real GDP and the price level in the short run.
D. What are the effcys of the bank failure on real GDP and the price level in the long run?