Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Macroeconomic help. please show work so i can see how to do it. QUESTION 31 Suppose people hold $1000 million of currency, total checking deposits

Macroeconomic help. please show work so i can see how to do it.

image text in transcribed
QUESTION 31 Suppose people hold $1000 million of currency, total checking deposits in the commercial banking system are $5000 million, and commercial bank reserves (held at the Federal Reserve) are $500 million. In this case, (assuming no traveler's checks), the M1 money supply equals O $1500 million $5000 million $6000 million $6500 million QUESTION 32 Suppose people hold $1000 million of currency, total checking deposits in the commercial banking system are $5000 million, and commercial bank reserves (held at the Federal Reserve) are $500 million. Assume that commercial banks do not hold excess reserves. In this case, the required reserve ratio is O 7.7% O 8.3% O 10% O 20% QUESTION 33 Suppose the required reserve ratio is 10 percent, and commercial banks do not hold excess reserves at the Federal Reserve. Suppose that an individual withdraws $1 million out of their checking account at BankOne. Then, all else equal, the total amount of loans and bonds at BankOne must increase by $1 million. O the total amount of loans and bonds at BankOne must decrease by $1 million. the total amount of loans and bonds at BankOne must increase by $900,000. the total amount of loans and bonds at BankOne must decrease by $900,000

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

How China Escaped Shock Therapy The Market Reform Debate

Authors: Isabella M Weber

1st Edition

0429953968, 9780429953965

More Books

Students also viewed these Economics questions

Question

recognize unresolved and critical issues regarding job crafting;

Answered: 1 week ago

Question

2. Value-oriented information and

Answered: 1 week ago

Question

1. Empirical or factual information,

Answered: 1 week ago

Question

1. To take in the necessary information,

Answered: 1 week ago