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Suppose that currency in circulation is $ 6 0 0 billion, the amount of chequable deposits is $ 9 0 0 billion, and excess reserves
Suppose that currency in circulation is $ billion, the amount of chequable deposits is $ billion, and excess reserves are $ billion. Next month, the central bank conducts an unusually large open market purchase of bonds held by banks of $ billion due to a sharp contraction in the economy.
Required: Calculate
a the excess reserves,
b the excess reserve ratio,
c the money supply, and
d the money multiplier?
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