Question
Consider an economy where 80 percent of the money is held as demand deposits and the rest as currency. Banks hold 10 percent of deposits
Consider an economy where 80 percent of the money is held as demand deposits and the rest as currency. Banks hold 10 percent of deposits as reserves. The monetary base is 500 billion pesos. (a) Calculate the money multiplier (b) Calculate the money supply
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Principles of economics
Authors: N. Gregory Mankiw
6th Edition
978-0538453059, 9781435462120, 538453052, 1435462122, 978-0538453042
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