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Kaplan University MT445 unit 9 assignment

Question # 00016277
Subject: Economics
Due on: 06/21/2014
Posted On: 05/27/2014 02:59 PM

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Unit 9 Assignment

Student Name:

Please answer the following questions. Submit as a Microsoft Word® document to the Dropbox when completed.

1. Determine whether each of the following is counted in the M1 measure of the money supply:

i. The coins in your piggy bank.

ii. The funds in your checking account at First National Bank.

iii. The funds in your savings account at Second National Bank.

iv. The traveler’s check you have left over from your trip to Germany.

v. The available balance on your Citico Gold MasterCard.

2. Refer to the simplified balance sheet for a bank and answer the following questions.

Assets

Liabilities

Reserves

$10,000

Deposits

$70,000

Loans

$66,000

Stockholder's equity

$6,000

a. If the required reserve ratio is 5 percent, how much in excess reserves does this bank hold?

b. What is the maximum amount this bank can expand its loans?

c. What will happen to the M1 money supply if it makes the loans in (b) above and those funds are deposited into another bank by the borrowers?


3. Assume the interest rate on a Treasury bill is 2 percent and will pay its owner $1,000 when it matures in one year.

i. What is the price of the Treasury bill in today’s market?

ii. Suppose that the Fed engages in open market sales which results in the interest rate on new one-year Treasury bills rising to 3 percent. What will happen to the price of these existing Treasury bills with rates of 2 percent? Why?

4. Identify each of the following events as:

a) part of an expansionary fiscal policy

b) part of a contractionary fiscal policy

c) or not part of fiscal policy

i. The corporate income tax rate is increased.

ii. Defense spending is increased.

iii.Families are allowed to deduct all daycare expenses from their federal income taxes.

iv.The individual income tax rate is decreased.

v. The State of New York builds a new highway.

Directions for Submitting your Assignment

Complete your assignment in this Microsoft Word® document and save it as Username-MT445Assignment-Unit#.doc (Example:TAllen-MT445Assignment-Unit9.doc). Submit your file by selecting the Unit 9: Assignment Dropbox by the end of Unit 9.

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Kaplan University MT445 unit 9 assignment

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Preview: Bank xx The xxxxxxxxx check you xxxx left over xxxx your xxxx xx Germany xxx The available xxxxxxx on your xxxxxx Gold xxxxxxxxxx xx 2 xxxxx to the xxxxxxxxxx balance sheet xxx a xxxx xxx answer xxx following questions xxxxxxxxxxxxxxxxxxxxxxxxx 10,000 Deposits xxxxxx Loans xxxxxx xxxxxxxxxxxx equity xxxxx If the xxxxxxxx reserve ratio xx 5 xxxxxxxx xxx much xx excess reserves xxxx this bank xxxx 70,0000 xxxxxxx xxxxxxxxxxxxxxxxx What xx the maximum xxxxxx this bank xxx expand xxx xxxxx 70,000-3,50066,500 xxxxxxxxxxxxxxxx The bank xx able to xxxx out xx.....
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