What is the significance of calling the deposits you make in your checking account demand deposits?
Answer to relevant QuestionsExplain how a new demand deposit of $100 can potentially create $500 of new money if the legal reserve requirement is 20 percent. Suppose the Federal Reserve raised the reserve requirement to 50 percent. Show how that would affect the value of money creation through the first 5 stages of deposit and loan in practice problem 1. Who prints currency for whom? How does the currency finally make its way to the thousands of banks operating in the economy? "Unions make it difficult for government to reduce the rate of unemployment." Discuss the logic underscoring this view and show how it relates to the Phillips curve. What is a transfer payment? Why does the gov-ernment engage in such transfers?
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