1. Why and how? Bank A has an increase in deposits of $20 million dollars and all bank reserve requirements are 10 percent. Bank A loans out the full amount of the deposit increase that is allowed. This amount winds up deposited in Bank B. Bank B lends out the full amount possible as well and this amount winds up deposited in Bank C. What is the total increase in deposits resulting from these three banks?
38)
A) $60.00 million B) $48.00 million C) $57.10 million D) $56.33 million E) $54.20 million
2. You saved $500 into a C.D. account with 6% APR for a year. During the year, consumer price index (CPI) increased 2%. How much is the percentage increase of your purchasing power? What is the financial name of your answer?