Question: Q.2 MS = CC + DD+TD MB = CC +R CC =CDD, TD=rDD a. Derive money multiplier b. Is this true that higher is the

Q.2 MS = CC + DD+TD MB = CC +R CC

Q.2 MS = CC + DD+TD MB = CC +R CC =CDD, TD=rDD a. Derive money multiplier b. Is this true that higher is the r lower is the money multiplier? Explain your answer. serve c. Use the following table and derive DM and LM in which commercial bank hold reser for its own use (R), hold reserve for central bank (Rc), and lend money (L). The borrower immediately withdraw (W) a fraction of loan (1-5) and deposit the rest in the same bank. D X R 7X Rc ex L (1-1-OX W (1-3)(1-1-OX

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