Question

please answer all questions 25-29! the information needed is written above but if you can't read it properly it's listed as follows: in an imperial bank, customer deposits = $1000, Deposits at the bank of Canada = $10, cash on hand = $60, and desired reserve coefficient = 5%

Bank uk 25. - U VU b) $200 (6) $400 d) $600 Customer deposits & $1000, deconto at Bank of Canada - If the Bank of Canada transfers some of its Reliable Bank, Bank of Canada total assets w a) increase by $1,000 Bank of Canada=810, cash on hand =860, desired resove coedfent ansfers some of its Government of Canada deposits to 510 b) decrease by $1,000 c) remain unchanged 26. transfers some of its Government of Canada deposits to If the Bank of Canada transfers some of its Gover Reliable Bank, Reliable Bank assets will a) increase b) decrease c) remain unchanged. 27. Assume that Gamma is a closed economy with a full employment billion and a propensity to save (MPS) of 0.2. Ift sa closed economy with a full employment GDP of $800 pensity to save (MPS) of 0.2. If the current (real) GDP is $600 y how much would government expenditures need to change to reach full employment (assuming constant prices)? a) increase by $40 billion b) increase by $200 billion c) decrease by $200 billion d) decrease by $250 billion 28. In 2018, an employer paid his employees an average real wage rate of $10 when the CPI was 120. Suppose that in 2019. the CPI increased to 125 (from 120 in 2018). If the employer wants to increase the average actual wage by 5% (over their 2018 level), what should be the actual wage in 2019? a) $12.00 b) $12.50 c) $12.60 d) $13.00 29. In 2019, Beta's real GDP per capita was $15,000 and growing annually at 6%. Using the “Rule of 70", it will take years to double real income per capita and years using the formula F=P(1+g)(round to the closer half or full iar in cach case (2nd decimal, no round, ra) 15.02; 14.1 b) 12:00; 17,53 d 17.61% 17.89 d) 12.67; 19.92

Thanks so much!

Answer 1

25) When government of Canada deposit money into bank of Canada,there was two entries in the balance sheet of bank ba Canada.

First Increase in liability by same amount of deposit.

Second Increase in assest by same amount ,enter as reserves.

When bank of Canada deposit some of that deposit into reliable bank ,the assest doesn't Increase instead,the reserve Decreases and loan Increases.and total assest remind unchanged.

Option c is right

26) The deposit ,for reliable bank is liabilities ( thet have to pay interest),so liabilities Increases.

But those deposit can be used as lending loans from which they earn interst,so assest also Increases.

So option A is right.

27) multiplier=1/ mps=1/0.2=5

∆y=Multiplier*∆G

∆G=∆Y/5

∆Y=200

∆G=200/5=40

Option A is correct

28)Real wage is actual wage when CPI =100

So actual wage in 2018.

120/100=actual wage 2018/10

Actual wage=12.

Wage increase by 5% in 2019

Wage in 2019=12*1.05=12.6

Option C is right

29) using rule of 70,

70/6=1.667{ time take to double)

(1.06)^n=30,000/15000

(1.06)^11.895661046=2

n=11.895661046