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Use the following reserve ratios to find the monetary multiplier (m) for each. i. 20% ii. 5% iii.10% iv. 40% (Show work.) Assuming an

 

Use the following reserve ratios to find the monetary multiplier (m) for each. i. 20% ii. 5% iii.10% iv. 40% (Show work.) Assuming an excess reserve (E) of $85,000 (billion) for the entire banking system; find the maximum amount (D) that can be loaned using the reserve ratios from part "a". Show work. Hint: D = Ex m b. C. Give two problems associated with "Fiscal policy". List and briefly discuss the "lags"?

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To find the monetary multiplier m for each reserve ratio we can use the formula for the money multiplier m 1 reserve ratio Lets calculate m for each o... blur-text-image

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