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At present the currency with the people and their demand deposits with banks contribute 2 0 0 million to the economy. This value is derived

At present the currency with the people and their demand deposits with banks contribute 200 million to the economy. This value is derived from the peoples behavior where they used to deposit 80% of their money and 20% take it as cash. Also, the banks have to maintain the required reserve of 10%.

i. Calculate the size of high-powered money.

ii. How does the answer (i) change for bank reserves ratio of a) zero percent; b) 5 percent; and c) 20 percent?

iii. How does the answer (i) change for general public cash holding of a) zero percent; b) 5 percent; and c) 100 percent?

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