n? Consider the following table where we assume that when a commercial bank receives $X, it keeps

n?

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Consider the following table where we assume that when a commercial bank receives $X, it keeps $3X as a reserve and loans out ($1-3)X. The borrower immediately deposits the whole amount of money. A(DM) AB Demand Deposit (DD) X (1-3) X and ... Reserve BX B(1-3)X A(LM) AB ... a) Find the Demand Deposit Multiplier (DM) (3 points) b) Find the Loan Multiplier (LM) (2 points) c) Is there a mathematical relationship between DM and LM? If yes, state and interpret it (2 points) d) Find Loan (1-3) X (1-3)²X Table 1: Central Bank Money Cycle and intepret the results (3 points) Consider the following table where we assume that when a commercial bank receives $X, it keeps $3X as a reserve and loans out ($1-3)X. The borrower immediately deposits the whole amount of money. A(DM) AB Demand Deposit (DD) X (1-3) X and ... Reserve BX B(1-3)X A(LM) AB ... a) Find the Demand Deposit Multiplier (DM) (3 points) b) Find the Loan Multiplier (LM) (2 points) c) Is there a mathematical relationship between DM and LM? If yes, state and interpret it (2 points) d) Find Loan (1-3) X (1-3)²X Table 1: Central Bank Money Cycle and intepret the results (3 points)

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a The Demand Deposit Multiplier DM is the ratio of the change in t... View the full answer