Answer the following questions based on the information in the table. All answers should be rounded...
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Answer the following questions based on the information in the table. All answers should be rounded to two decimals. December 1931 December 1932 Currency held by public Reserve-deposit Bank reserves Money supply (in billions) (in billions) ratio (in billions) 0.095 0.109 $4.59 $4.82 $3.11 $3.18 $37.3 $34.0 Note, the Fed added $0.30 billion in reserves, of which $0.23 went into the hands of the public ($4.82 - $4.59) and $0.07 billion were added to bank reserves ($3.18 - $3.11). Calculate the quantity of additional reserves the Federal Reserve would have had to inject into the economy in 1932 to prevent the money supply from falling, given that the public increased the amount of currency it held and that banks increased the reserve-deposit ratio? Hint, your calculation of additional reserves should be added to the $0.30 that the Fed injected in 1932. Calculate the decrease in total amount of bank deposits decreased from 1931 to 1932. Calculate the money supply at the end of 1932 if the public had not decided to hold more currency in 1932, but the actions of the Federal Reserve and the banks remained the same. Answer the following questions based on the information in the table. All answers should be rounded to two decimals. December 1931 December 1932 Currency held by public Reserve-deposit Bank reserves Money supply (in billions) (in billions) ratio (in billions) 0.095 0.109 $4.59 $4.82 $3.11 $3.18 $37.3 $34.0 Note, the Fed added $0.30 billion in reserves, of which $0.23 went into the hands of the public ($4.82 - $4.59) and $0.07 billion were added to bank reserves ($3.18 - $3.11). Calculate the quantity of additional reserves the Federal Reserve would have had to inject into the economy in 1932 to prevent the money supply from falling, given that the public increased the amount of currency it held and that banks increased the reserve-deposit ratio? Hint, your calculation of additional reserves should be added to the $0.30 that the Fed injected in 1932. Calculate the decrease in total amount of bank deposits decreased from 1931 to 1932. Calculate the money supply at the end of 1932 if the public had not decided to hold more currency in 1932, but the actions of the Federal Reserve and the banks remained the same.
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Currency hold by Public In Billions December 1931 459 December 1932 482 Reserve ... View the full answer
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