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suppose that the money base is $500 billion, reserve deposit ratio is 0.1 and currency deposit ratio is 0.5. Use this information to answer the

suppose that the money base is $500 billion, reserve deposit ratio is 0.1 and currency deposit ratio is 0.5. Use this information to answer the following questions

a. find the value of the money multiplier

b. using the multiplier from part A, compute the money supply

c. now suppose households decide to hold more money in cash (currency) and less in deposits. carefully explain what will happen to money supply

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