- Please Answer Part D 1 (52.69 KiB) Viewed 8 times
PLEASE ANSWER PART "d"
-
answerhappygod
- Site Admin
- Posts: 899603
- Joined: Mon Aug 02, 2021 8:13 am
PLEASE ANSWER PART "d"
PLEASE ANSWER PART "d"
There is a striking similarity between the simple multiplier and the deposit multiplier. a. Suppose the marginal propensity to spend out of GDP, z, is 0.7. If autonomous spending increases by $3,000, fill in Table 1 to the right. (Round your responses to the nearest dollar.) b. The sum of the values in the third column should be: AY = $3,000 + (0.7) × $3,000 + (0.7)² × $3,000 + ... The total change in GDP for this situation is $ 10000. (Round your responses to the nearest cent.) c. Now consider the process of deposit creation from this chapter. Consider a new deposit of $3,000 and a target reserve ratio, v, of 0.20 (with no cash drain). Fill in the new table, Table 2. (Round your responses to the nearest dollar.) d. The sum of the values in the first column should be: AY = $3,000 + (1 -0.20) × $3,000 + (1 -0.20)² × $3,000+. The total change in deposits in this situation is $ (Round your responses to the nearest cent.) First Second Third Fourth Round Round First Second Third Fourth $3,000 $ 2400 Table 1 ΔΑΕ $ 1920 $ 1536 $3,000 $ 2100 $ 1470 $ 1029 AY $3,000 $ 2100 Table 2 ADeposits AReserves ALoans $2,400 $ 1920 $ 1536 $ 1229 $1470 $ 1029 $600 $ 480 $ 384 $ 307 PLEASE ANSWER PART "d" OTHER PARTS ARE CORRECT
There is a striking similarity between the simple multiplier and the deposit multiplier. a. Suppose the marginal propensity to spend out of GDP, z, is 0.7. If autonomous spending increases by $3,000, fill in Table 1 to the right. (Round your responses to the nearest dollar.) b. The sum of the values in the third column should be: AY = $3,000 + (0.7) × $3,000 + (0.7)² × $3,000 + ... The total change in GDP for this situation is $ 10000. (Round your responses to the nearest cent.) c. Now consider the process of deposit creation from this chapter. Consider a new deposit of $3,000 and a target reserve ratio, v, of 0.20 (with no cash drain). Fill in the new table, Table 2. (Round your responses to the nearest dollar.) d. The sum of the values in the first column should be: AY = $3,000 + (1 -0.20) × $3,000 + (1 -0.20)² × $3,000+. The total change in deposits in this situation is $ (Round your responses to the nearest cent.) First Second Third Fourth Round Round First Second Third Fourth $3,000 $ 2400 Table 1 ΔΑΕ $ 1920 $ 1536 $3,000 $ 2100 $ 1470 $ 1029 AY $3,000 $ 2100 Table 2 ADeposits AReserves ALoans $2,400 $ 1920 $ 1536 $ 1229 $1470 $ 1029 $600 $ 480 $ 384 $ 307 PLEASE ANSWER PART "d" OTHER PARTS ARE CORRECT