Suppose that due to a reduction in the required reserve ratio, the marginal product of deposits increases.
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Suppose that due to a reduction in the required reserve ratio, the marginal product of deposits increases. Illustrate the impact of this change on the interest rate paid on deposits and the quantity of deposits obtained by a bank with market power in both the loan and deposit markets.
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Related Book For 
Money Banking And Financial Markets An Economic Approach
ISBN: 9780395643952
1st Edition
Authors: Michael R. Baye, Dennis Jansen
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