Consider the recurring spending and earning experience of Patrick: Mon-day throu

Question

Consider the recurring spending and earning experience of Patrick: Mon-day through Saturday, ho buys only beer at Jed's, at dollar 1.00/bottle (he like Professor Driskill, receives the "good-looking-guy" discount). He buys 7 bottles on Monday evening, 6 on Tuesday evening, 5 on Wednes­day evening, 4 on Thursday evening, 3 on Friday evening. 2 on Saturday evening, and 1 on Sunday evening. Patrick earns money by writing es-says. He gets dollar 1/essay, and he writes 1 essay on Monday morning. 2 on Tuesday morning, 3 on Wednesday morning. 4 on Thursday morning, 5 on Friday morning, 6, on Saturday morning, and 7 on Sunday morning. To carry out his planned expenditures each week, on each Monday Patrick needs how much money in his possession? Dollar 28. Dollar 12. Dollar 6. Dollar 10. Re-consider Patrick's earnings-expenditure problem from the preceding question if all prices in his world increase by 100 percentage. i.e., if he now earns dollar 2/essay and pays dollar 2/beer. To carry out his planned expenditures each week, he would need in his possession on each Monday dollar 20. dollar 18. dollar 24. dollar I2. Commercial banks Have short-maturity assets and long-maturity liabilities Hold reserves only because the Fed requires it of them. Are required to make loans equal to 95% of the level of their demand deposits. Hold excess reserves because of the risk of unexpected net with­drawals.

Explanation / Answer

26(b) 12

27(c) 24

28(d)

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