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please help me i will give good rating Question 2 Suppose that in a hypothetical Country XYZ, the required reserve ratio is 2%, currency in

please help me i will give good rating

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Question 2 Suppose that in a hypothetical Country XYZ, the required reserve ratio is 2%, currency in circulation is RM130 billion, the amount of demand deposits is RM420 billion, and excess reserves are RM5 billion. (a) Calculate the money supply (MI), the currency deposit ratio, the excess reserve ratio, and the money multiplier of Country XYZ. (b) Suppose the Central Bank of Country XYZ conducts an open market purchase of bonds held by banks of RM200 billion to boost its economy due to the covid19 pandemic. Assuming the ratios you calculated in part (a) remain the same, except that banks choose to hold all of its proceeds as excess reserves rather than loan them out. Predict the effect on M1 in Country XYZ. 1

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