Assignment # 2<\/p>\n
What happens to the overall money supply when a person who sells a government bond to the Central Bank (SAMA) places the proceeds in a local bank?<\/p>\n
What is the burden of the public debt?<\/p>\n
It may be argued that the effects of a higher public debt are the same as the effects of higher taxes. Why?<\/p>\n
What is discretionary fiscal policy? What are automatic stabilizers? Give examples of each. <\/p>\n
How does the crowding out effect tend to offset expansionary fiscal policy?<\/p>\n
Assume a 5% required reserve ratio, zero excess reserves, no currency leakage, and a ready loan demand. SAMA buys a SR1 million government bond from investment institution. <\/p>\n
What is the maximum money multiplier?<\/p>\n
By how much will total deposits rise? <\/p>\n
If the high powered money \u201cH\u201d in the Saudi Arabian economy is SR600 billion and the money multiplier \u201cm\u201d is 1.5, find out the following: <\/p>\n
Total money supply \u201cM\u201d in the money market in Saudi Arabia.<\/p>\n
Calculate the Cash-Reserve Ration (CRR). <\/p>\n
Assume that the required reserve ratio is 15 percent and that SAMA sells SR3 million worth of government securities to a costumer who pays with a check drawn on the Riyad Bank. <\/p>\n
The excess reserve of Riyad Bank changed by how much?<\/p>\n
By how much has the money supply changed?<\/p>\n
Suppose that the T-account for National Commercial Bank is as follows:<\/p>\n
Assets (thousands) Liabilities (thousands)<\/p>\n
Reserves SR 100 Deposit SR 800<\/p>\n
Loan SR 700<\/p>\n
Total SR 800 SR 800<\/p>\n
If SAMA requires banks to hold 5% of deposits as reserves requirement, how much in excess reserves does the National Commercial Bank now hold?<\/p>\n
If National Commercial Bank decides to reduce its reserves to only the required amount, will the economy\u2019s money supply increase or decrease? Explain.<\/p>\n
What is the money multiplier in this economy?<\/p>\n
Complete the table below.<\/p>\n
Determine the marginal propensity to consume and the marginal propensity to save.<\/p>\n
Determine the average propensity to consume and the average propensity to save for each level of income.<\/p>\n
Disposable income<\/p>\n
Consumption<\/p>\n
Saving<\/p>\n
SR500<\/p>\n
600<\/p>\n
700<\/p>\n
800<\/p>\n
900<\/p>\n
1000<\/p>\n
SR510<\/p>\n
600<\/p>\n
690<\/p>\n
780<\/p>\n
870<\/p>\n
960<\/p>\n
Suppose that consumption equals SR500 billion and total income equals SR650 billion.<\/p>\n
If the marginal propensity to consume is equal to 0.8, what must savings be equal to?<\/p>\n
What does the MPS equal?<\/p>\n
At the income level of SR650 billion, what does the APC come to?<\/p>\n
Consider a closed. Private economy in which C = SR30 + 3\/4Y and I = SR25. What will the equilibrium level of real national income (Y) be equal to in this economy? (Hint: In equilibrium real national income must equal total planned expenditures, or Y = C + I.)<\/p>\n
Bank 1 received a deposit of SR1 million. Assuming that the banks retain no excess reserves, answer the following questions: <\/p>\n
The reserve requirement is 25 percent. <\/p>\n
Fill in the blanks in the table below. <\/p>\n
What is the deposit multiplier?<\/p>\n
Multiple Deposit Creation<\/p>\n
Round<\/p>\n
Deposits<\/p>\n
Reserves <\/p>\n
Loans<\/p>\n
Bank 1<\/p>\n
Bank2<\/p>\n
Bank3<\/p>\n
Bank 4<\/p>\n
Bank5<\/p>\n
All other banks<\/p>\n
Totals<\/p>\n
SR1, 000,000<\/p>\n
SR<\/p>\n
SR<\/p>\n
Now the reserve requirement is 5 percent. <\/p>\n
Fill in the blanks in the similar table. <\/p>\n
What is the deposit multiplier?<\/p>\n
Multiple Deposit Creation<\/p>\n
Round<\/p>\n
Deposits<\/p>\n
Reserves <\/p>\n
Loans<\/p>\n
Bank 1<\/p>\n
Bank2<\/p>\n
Bank3<\/p>\n
Bank 4<\/p>\n
Bank5<\/p>\n
All other banks<\/p>\n
Totals<\/p>\n
SR1, 000,000<\/p>\n
SR<\/p>\n
SR<\/p>\n
If the required reserve ratio is 10%, what will be the maximum change in the money supply in each of the following situations? <\/p>\n
Abdullah deposits in Riyad bank a check drawn on SAMBA bank.<\/p>\n
Abdullah buys a SR5,000 Saudi government bond from Saudi Central Bank by drawing down on his checking account. <\/p>\n
Abdullah sells a SR10,000 Saudi government bond to the Saudi Central Bank and deposit the SR10,000 in NCB bank.<\/p>\n
Abdullah writes a SR10,000 check on his own account and takes SR1,000 in currency and buries it in his backyard.<\/p>\n","protected":false},"excerpt":{"rendered":"
Assignment # 2 What happens to the overall money supply when a person who sells a government bond to the Central Bank (SAMA) places the proceeds in a local bank? What is the burden of the public debt? It may be argued that the effects of a higher public debt are the same as the […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[10],"class_list":["post-79130","post","type-post","status-publish","format-standard","hentry","category-research-paper-writing","tag-writing"],"_links":{"self":[{"href":"https:\/\/papersspot.com\/blog\/wp-json\/wp\/v2\/posts\/79130","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/papersspot.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/papersspot.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/papersspot.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/papersspot.com\/blog\/wp-json\/wp\/v2\/comments?post=79130"}],"version-history":[{"count":0,"href":"https:\/\/papersspot.com\/blog\/wp-json\/wp\/v2\/posts\/79130\/revisions"}],"wp:attachment":[{"href":"https:\/\/papersspot.com\/blog\/wp-json\/wp\/v2\/media?parent=79130"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/papersspot.com\/blog\/wp-json\/wp\/v2\/categories?post=79130"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/papersspot.com\/blog\/wp-json\/wp\/v2\/tags?post=79130"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}