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Assume that the monetary base is $2,000.Peple hold a third of their money in the form of currency and deposit two thirds with banks.The banks

Assume that the monetary base is $2,000.Peple hold a third of their money in the form of currency and deposit two thirds with banks.The banks hold a third of their deposits in reserve.

a) What are the reserve-deposit ratio, the currency-deposit ratio, the money multiplier, and the money supply?

b) What if people hold half of their money in the form of currency.How would your answers to a) change?

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