1. which of the following would be counted as gross domestic
investment?
- GM issues 1 million shares of stock
- consolidated construction purchases 1,000 acres of land for a
regional shopping center it plans to build in a few years.
- a walmart store adds 1,000 T-shirts to ti's
inverotry
- A college buys computers for it's office staff
- you and your significant other buy a house
- you put money into a saving accountÃâ
2. a car company currently has a capital stock of $100 million
and desires a capital stock of $110 million
a. if it experiences no depreciation how mch will it need to
invest to get to its desired level of capital stock
b. if its annual depreciation is 5% how much will it need to
invest to get to its desired level
c. if its annual depreciation is 10% how much will it need to
invest to get to its desired level
3. use the information below to compute the levels of gross and
net private domestic investment data are in billions of dollars
a. change in business inventories $59.3
b. residental cinstruction 369.6
c. producers durable equipment 691.3
d. nonresidential structures 246.9
e. depreciation 713.9
4. complete the table which shows investment in the united
states in billions of 2000 chained dollars
year 2005 gross domestic investment 1,873.5 depreciation 1,266.6 net private domestic investment ?
year 2006 gross domestic investnment ? depreciation 1,2161 net priavte domestic investment 696.4
year 2007 gross domestic investment 1,809.7 depreciation ? net priavate domestic investment 546.7
5. which of the following is part of M1 and M2
a. $0.27 that has accumulated under a couch cushion
b. your $2,000 line of credit with your visa account
c. $210 balance in your checking account
d. $417 in your savings account
e. 10 shares of the recently issued facebook stock that your
grandma gave you
f. $200 in travelers checks you purchased before your summer
trip to italy
6. suppose a banks balance sheet looks as follows:
assets
reservers
$2,700
property
$ 4,500
liabilities
deposits $7,200
and banks the reserve requirement is 20 percent
a. how much is excess reserves ratio 20 percent
b. how much can this bank lend
7. suppose a bank A with 25% reserve requirement has $50 million
in reserves and $200 million in checkable deposits one of the banks
depositors a major corporation writes a check to another
corporation for $5 million the check is deposited in another bank
(bank B)
a. explain how the withdrawl affects the banks reserves and
checkable deposits
b. by how much must bank A have to reduce lending?
8. assume the bank of america has access reserves of $30
milllion and outstanding transaction (checking) deposits of $180
million if the reserve ratio is 10% what is the size of the bank of
america total reserves?
9 banks fail when all depositors try to withdraw money at the
same time one way to prevent this problem would be to require bank
to hold 0 of deposits on hand
a. why would this not be desirable thing to do
b. what would happen to the banking system
c. explain how the law which requires banks to purchase fdic
insurance makes 100% reserve system unnecessary.
1. which of the following would be counted as gross domestic
investment?
- GM issues 1 million shares of stock
- consolidated construction purchases 1,000 acres of land for a
regional shopping center it plans to build in a few years.
- a walmart store adds 1,000 T-shirts to ti's
inverotry
- A college buys computers for it's office staff
- you and your significant other buy a house
- you put money into a saving accountÃâ
2. a car company currently has a capital stock of $100 million
and desires a capital stock of $110 million
a. if it experiences no depreciation how mch will it need to
invest to get to its desired level of capital stock
b. if its annual depreciation is 5% how much will it need to
invest to get to its desired level
c. if its annual depreciation is 10% how much will it need to
invest to get to its desired level
3. use the information below to compute the levels of gross and
net private domestic investment data are in billions of dollars
a. change in business inventories $59.3
b. residental cinstruction 369.6
c. producers durable equipment 691.3
d. nonresidential structures 246.9
e. depreciation 713.9
4. complete the table which shows investment in the united
states in billions of 2000 chained dollars
year 2005 gross domestic investment 1,873.5 depreciation 1,266.6 net private domestic investment ?
year 2006 gross domestic investnment ? depreciation 1,2161 net priavte domestic investment 696.4
year 2007 gross domestic investment 1,809.7 depreciation ? net priavate domestic investment 546.7
5. which of the following is part of M1 and M2
a. $0.27 that has accumulated under a couch cushion
b. your $2,000 line of credit with your visa account
c. $210 balance in your checking account
d. $417 in your savings account
e. 10 shares of the recently issued facebook stock that your
grandma gave you
f. $200 in travelers checks you purchased before your summer
trip to italy
6. suppose a banks balance sheet looks as follows:
assets
reservers
$2,700
property
$ 4,500
liabilities
deposits $7,200
and banks the reserve requirement is 20 percent
a. how much is excess reserves ratio 20 percent
b. how much can this bank lend
7. suppose a bank A with 25% reserve requirement has $50 million
in reserves and $200 million in checkable deposits one of the banks
depositors a major corporation writes a check to another
corporation for $5 million the check is deposited in another bank
(bank B)
a. explain how the withdrawl affects the banks reserves and
checkable deposits
b. by how much must bank A have to reduce lending?
8. assume the bank of america has access reserves of $30
milllion and outstanding transaction (checking) deposits of $180
million if the reserve ratio is 10% what is the size of the bank of
america total reserves?
9 banks fail when all depositors try to withdraw money at the
same time one way to prevent this problem would be to require bank
to hold 0 of deposits on hand
a. why would this not be desirable thing to do
b. what would happen to the banking system
c. explain how the law which requires banks to purchase fdic
insurance makes 100% reserve system unnecessary.
Related textbook solutions
Related questions
1. The multiplier helps explain
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A. why a decrease in taxes causes real Gross Domestic Product (GDP) to fall by more than the amount of the decrease in taxes. |
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B. why a fall in investment cause real Gross Domestic Product (GDP) to rise by more than the amount of the decrease in investment. |
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C. why a rise in government expenditures causes real Gross Domestic Product (GDP) to rise by more than the amount of the increase in government spending. |
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D. why an increase in disposable income causes real Gross Domestic Product (GDP) to rise by less than the amount of the increase in disposable income.
2. If the marginal propensity to save (MPS) increases, the multiplier
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