deposit multiplier question

Related BrainMass Solutions

• calculation of the value of the simple deposit expansion multiplier

  I got this far, but my last question asks what the value of the simple deposit expansion multiplier is. I think it is 1/0.05 or 20.

• deposits as reserves

  
  
  Then this becomes a deposit multiplier question:
  Deposit multiplier = 1 / Reserve Ratio = 1/25% =1/0.25 = 4
  Which means for each $1 increase in deposit will increase money supply by 4 times.

• Money supply

  Money supply will grow as per the deposit multiplier.

• Required Reserve Ratio in Cambridge Bank

  Real-world money multiplier in the economy is: 1/r r = percentage of deposits banks hold in reserve =1/.1 =10 times Change in Money stock= Multiplier*Deposit-deposit =10*50000-50000 =$450000=Answer http://www.investorwords.com/4206/reserve_ratio.html

• Money multiplier, credit creation, required reserve ratio

  Total Amount of credit creation= Money multiplier x Initial deposit= $25,000 = 5*5000 Thus money multiplier decreases to 5 and Total Amount of credit creation reduces to $25,000 The solution calculates the value of money multiplier,

• Money Multiplier and Reserve Ratio

  the reserve ratio M= 1/.23 =4.35 Total amount of new money =Additional deposit * Money multiplier =27000*4.35 =$117450.

• Demand Deposit Multiplier

  That is, an initial amount of excess reserves equal to E1 creates new money equal to this amount multiplied by the money multiplier demand deposit in case of new scenario will be $100000*6.67=6,67,000 the demand deposit in case of old scenario will

• Money Supply Multipliers

  Calculate the chartered banks' deposit multiplier, and the increase in chartered bank deposits.

• Impact on the balance sheet of the bank

  Money supply will grow as per the deposit multiplier.