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Question 3- Assume the demand for deposit equals 100,000 goods and the non-borrowed part of the monetary base is $20,000. Let the reserve requirement be
Question 3- Assume the demand for deposit equals 100,000 goods and the non-borrowed part of the monetary base is $20,000. Let the reserve requirement be 12 percent. a. Find the price level, the total money stock, and the real value of investment by banks in the absence of central bank lending. b. Now assume that the central bank allows banks to meet one-third of their reserve requirement by borrowing 'om the central bank and that banks take full advantage of this privilege. Answer part a given this new assumption
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