Problem #1: Assume you have $1,000 of currency you want to deposit in your checking account....
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Problem #1: Assume you have $1,000 of currency you want to deposit in your checking account. Assume the Required Reserve Ratio (RR) is 10 percent and no currency is withdrawn from the $1,000 deposit. 1. Calculate the Monetary Multiplier (m)? 2. Calculate the final outcome of a multiple-deposit expansion of the Money Supply (money created by the banking system)? 3. What is the Total Money Supply (Money Stock) circulating in the economy? Problem #1: Assume you have $1,000 of currency you want to deposit in your checking account. Assume the Required Reserve Ratio (RR) is 10 percent and no currency is withdrawn from the $1,000 deposit. 1. Calculate the Monetary Multiplier (m)? 2. Calculate the final outcome of a multiple-deposit expansion of the Money Supply (money created by the banking system)? 3. What is the Total Money Supply (Money Stock) circulating in the economy?
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