You just deposited $4,000 in cash into a saving account at the local bank. Assume that banks lend out all excess reserves and there are no leaks in the banking system. That is, all money lent by banks gets deposited in the banking system. Round your answers to the nearest dollar. If the reserve requirement is 16%, how much will your deposit increase the total value of checkable bank deposits? If the reserve requirement is 6%, how much will your deposit increase the total value of checkable deposits? Increasing the reserve requirement the money supply.

The money multiplier given the reserve requirement can be calculated by;

= 1/ reserve requirement.

1.  If the reserve requirement is 16%

Money Multiplier = 1/0.16

= 6.25

The increase in money supply ( checkable bank deposits) is the result of the money multiplier times the new cash.

= 6.25 * 4,000

= $25,000

2. If the reserve requirement is 6%

Money Multiplier = 1/0.06

= 16.67

Increase in money supply;

= 16.67 * 4,000

= $66,680‬

3. Increasing the reserve requirement increases the money supply.

in 2001, dell computer became the world’s largest personal computer vendor, continuing to

gain market share and post profits in an industry struggling with slumping sales and billions of

dollars in losses. dell sells 90% of its pcs directly to the final customer, largely bypassing the

reseller channel that accounts for most of the world’s pc sales. this direct customer relationship

is the key to dell’s business model, and provides distinct advantages over the indirect sales

model. dell’s direct relationship with the customer allows it to tailor its offerings to customer

needs, offer add-on products and services, and use the internet to offer a variety of customer

services. in addition, dell’s pcs are built to customers’ specifications upon receipt of an order,

giving dell additional advantages over indirect pc vendors who must try to forecast demand and

ship products based on those forecasts. dell’s direct sales and build-to-order model has achieved

superior performance in the pc industry in terms of inventory turnover, reduced overhead, cash

conversion, and return on investment (kraemer, et al., 2000).

explanation:

e would be the answer