Assume that the following data describe the condition of the banking system: Total reserves...............................$100 billion Transactions deposits.................$800
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Assume that the following data describe the condition of the banking system:
Total reserves...............................$100 billion
Transactions deposits.................$800 billion
Cash held by public.....................$400 billion
Reserve requirement...............................0.10
(a) How large is the money supply (M1)?
(b) How large are required reserves?
(c) How large are excess reserves?
(d) What is the money multiplier?
(e) By how much could the banks increase their lending activity?
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Related Book For
The Macro Economy Today
ISBN: 978-1259291821
14th edition
Authors: Bradley R. Schiller, Karen Gebhardt
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