In August of 2015, the Chinese central bank decided to reduce that nation's required reserve-deposit ratio...

 

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In August of 2015, the Chinese central bank decided to reduce that nation's required reserve-deposit ratio from 18.5 percent to 18 percent. Assuming no change in the amount of cash held by the Chinese public, that commercial banks lend all their excess reserves, and that bank reserves was a constant 4,329 billion yuan both before and after the change. billion yuan before this change in the reserve-deposit ratio and a. The value of Chinese banks deposits was after the change. b. Therefore the total change in deposits as a consequence of the change in the reserve-deposit ratio was billion.yuan billion yuan. In August of 2015, the Chinese central bank decided to reduce that nation's required reserve-deposit ratio from 18.5 percent to 18 percent. Assuming no change in the amount of cash held by the Chinese public, that commercial banks lend all their excess reserves, and that bank reserves was a constant 4,329 billion yuan both before and after the change. billion yuan before this change in the reserve-deposit ratio and a. The value of Chinese banks deposits was after the change. b. Therefore the total change in deposits as a consequence of the change in the reserve-deposit ratio was billion.yuan billion yuan.

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To solve this question we need to use the concept of the reservedeposit ratio The reservedeposit rat... View the full answer