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n? Consider the following table where we assume that when a commercial bank receives $X, it keeps $3X as a reserve and loans out ($1-3)X.
Consider the following table where we assume that when a commercial bank receives $X, it keeps $3X as a reserve and loans out ($1-3)X. The borrower immediately deposits the whole amount of money. A(DM) AB Demand Deposit (DD) X (1-3) X and ... Reserve BX B(1-3)X A(LM) AB ... a) Find the Demand Deposit Multiplier (DM) (3 points) b) Find the Loan Multiplier (LM) (2 points) c) Is there a mathematical relationship between DM and LM? If yes, state and interpret it (2 points) d) Find Loan (1-3) X (1-3)X Table 1: Central Bank Money Cycle and intepret the results (3 points)
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Elementary Statistics In Social Research Essentials
Authors: Jack A. Levin, James Alan Fox
3rd Edition
0205638007, 978-0205638000
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