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Assume that the central bank just printed a $100 bill and floated this into the economy. If the currency drain ratio (currency to deposit) is
Assume that the central bank just printed a $100 bill and floated this into the economy. If the currency drain ratio (currency to deposit) is 25% and the reserve ratio is 10% -
- Calculate the money multiplier. (2 marks)
- How much money will this $100 bill create in the economy? What will be the total amount of currency drain, new deposits, new reserves, and new loans?
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The Macro Economy Today
Authors: Bradley R. Schiller, Karen Gebhardt
14th edition
1259291820, 978-1259291821
