1. Use this table to calculate (show your work for partial credit) A. Currency in circulation...

         

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1. Use this table to calculate (show your work for partial credit) A. Currency in circulation 2,100 B. Money market mutual fund 1,100 C. Savings account deposits (Other liquid deposits) 13,200 D. Demand and checkable deposits 5,033 680 3,500 11,200 E. Small denominations time deposits F. 3 month treasury bills G. Credit card balances a. M1 b. M2 2. Suppose you transfer $5,000 from your checking deposit account to your savings deposit account. a. What is the immediate effect on M1? b. What is the immediate effect on M2? 3. Suppose you find $2,000 hidden in your attic. You deposit that $2,000 cash in your bank account and banks hold 20% of deposits as reserves and lend rest of it. a. Calculate the reserves your bank will hold from your deposit of $2,000 b. Calculate the maximum loan your bank would give from your deposit of $2,000 c. Calculate the simple money multiplier 1. Use this table to calculate (show your work for partial credit) A. Currency in circulation 2,100 B. Money market mutual fund 1,100 C. Savings account deposits (Other liquid deposits) 13,200 D. Demand and checkable deposits 5,033 680 3,500 11,200 E. Small denominations time deposits F. 3 month treasury bills G. Credit card balances a. M1 b. M2 2. Suppose you transfer $5,000 from your checking deposit account to your savings deposit account. a. What is the immediate effect on M1? b. What is the immediate effect on M2? 3. Suppose you find $2,000 hidden in your attic. You deposit that $2,000 cash in your bank account and banks hold 20% of deposits as reserves and lend rest of it. a. Calculate the reserves your bank will hold from your deposit of $2,000 b. Calculate the maximum loan your bank would give from your deposit of $2,000 c. Calculate the simple money multiplier

Answer rating: 100% (QA)

1 a M1 Currency in circulation Demand deposits Other checkable deposits 2100 5033 0 7133 b M2 M1 Sma... View the full answer