The U.S. money supply (M1) at the beginning of 2015 was $2,683.3 billion broken down as follows:
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The U.S. money supply (M1) at the beginning of 2015 was $2,683.3 billion broken down as follows: $1165.7 billion in currency, $3.5 billion in traveler’s checks, and $1,514.1 billion in checking deposits. Suppose the Fed decided to decrease the money supply by increasing the reserve requirement from 10 percent to 12 percent. Assuming all banks were initially loaned up (had no excess reserves) and currency held outside of banks did not change, how large a change in the money supply would have resulted from the change in the reserve requirement?
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If banks are loaned up and checking deposits are 15141 billion the 10 res...View the full answer
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Related Book For
Principles of Macroeconomics
ISBN: 978-0134078809
12th edition
Authors: Karl E. Case, Ray C. Fair, Sharon E. Oster
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