Consider the following data: Currency ............................$850 billion Checkable deposits ............700 billion Bank reserves .....................700 billion a. Calculate
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Consider the following data:
Currency ............................$850 billion
Checkable deposits ............700 billion
Bank reserves .....................700 billion
a. Calculate the values for the currency-todeposit ratio, the ratio of total reserves to deposits, the monetary base, the money multiplier, and the M1 money supply.
b. Suppose that the ratio of total reserves to deposits changes to 2.0 from the value you calculated in part (a). (Assume that the currency-to-deposit ratio remains the same.) Now what is the value of the money multiplier?
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Related Book For
Money, Banking, and the Financial System
ISBN: 978-0134524061
3rd edition
Authors: R. Glenn Hubbard, Anthony Patrick O'Brien
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