Explain how current financial institutions can create $342 out of a deposit of $200
What will be an ideal response?
Answer: After the $200 is deposited into a bank, that bank can use up to 90 percent ($180) to lend out. That loan is then deposited into some other account, 90 percent ($162) of which can then be lent out by the bank. Thus, through loans, $342 = $180 + $162 has been brought into the money supply. Financial institutions can create money not by printing bills and minting coins, but by taking in deposits and making loans. This expands the money supply because they are allowed to loan out most (although not all) of the money they take in from deposits.
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A bank can reduce the impact of a default risk by
A. having assets with the same time to maturity. B. making risky loans at low interest rates. C. making safe loans at high interest rates. D. diversifying its portfolio.
The specific methods of performance management that work in one country may fail in another, while general principles of performance management may apply in most countries.
Answer the following statement true (T) or false (F)
If a manager selects an employee to fit the task, trains that employee so she learns the best way of doing things, and then monitored her closely, that manager would be adhering to the principles of ______________.
a. Human relations b. Scientific management c. Autocratic management d. Transactional management
Jet Styling has the following beginning cash balance and cash transactions for the month of January. Using this information prepare a statement of cash flows.a.Beginning cash balance……………..$ 3,200b.Cash received from stock issuance.15,000c.Cash payment toward long-term loan1,000d.Cash payment of rent………………..1,800e.Purchased equipment for cash……..7,500f.Purchased store supplies for cash…1,500g.Cash collected from customers…….7,750h.Cash dividends paid…………..2,000i.Cash payment of wages…………….4,000
What will be an ideal response?