At present the currency with the people and their demand deposits with banks contribute 2 0 0
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Question:
At present the currency with the people and their demand deposits with banks contribute million to the economy. This value is derived from the peoples behavior where they used to deposit of their money and take it as cash. Also, the banks have to maintain the required reserve of
i Calculate the size of highpowered money.
ii How does the answer i change for bank reserves ratio of a zero percent; b percent; and c percent?
iii. How does the answer i change for general public cash holding of a zero percent; b percent; and c percent?
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