1. (a) Suppose the central bank decides to make Rs. 100,000 open market sale. If high powered money (H) = Rs. 500,000/-, required reserve ratio (rr) 0.20, excess reserve ratio (er) = 0.05 and currency deposit ratio (cd) = 0.25, what will be the total currency holdings of the public? %3D %3D

ENGR.ECONOMIC ANALYSIS
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ISBN:9780190931919
Author:NEWNAN
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Chapter1: Making Economics Decisions
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1. (a) Suppose the central bank decides to make Rs. 100,000 open market sale. If high powered money (H) = Rs.
500,000/-, required reserve ratio (rr) 0.20, excess reserve ratio (er) = 0.05 and currency deposit ratio (cd) =
0.25, what will be the total currency holdings of the public?
Transcribed Image Text:1. (a) Suppose the central bank decides to make Rs. 100,000 open market sale. If high powered money (H) = Rs. 500,000/-, required reserve ratio (rr) 0.20, excess reserve ratio (er) = 0.05 and currency deposit ratio (cd) = 0.25, what will be the total currency holdings of the public?
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