18. Assume the currency to deposit ratio has increased. What is the effect on banking system reserves,
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18. Assume the currency to deposit ratio has increased. What is the effect on banking system reserves, deposits, loans, and the money supply? Can the Fed adjust the re¬ quired reserve ratio and/or the monetary base to restore the money supply to its initial level? Can the Fed also restore de¬ posits, loans, and reserves to their initial levels? Explain.
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Money Banking And Financial Markets An Economic Approach
ISBN: 9780395643952
1st Edition
Authors: Michael R. Baye, Dennis Jansen
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