1. Answer each of the following questions. a Bank reserves are 100, the public holds 200 in currency, and the desired reserve-deposit ratio is 0.25. Find deposits and the money supply. b. The money supply is 500 and currency held by the public equals bank reserves. The desired reserve-deposit ratio is 0.25. Find currency held by the public and bank 1eserves. c The money supply is 1.250, of which 250 is currency held by the public. Bank reserves are 100. Find the desired reserve-deposit ratio.

Essentials of Economics (MindTap Course List)
8th Edition
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter21: The Monetary System
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1.
Answer each of the following questions.
a. Bank reserves are 100, the public holds 200 in currency, and the desired reserve-deposit
ratio is 0.25. Find deposits and the money supply.
b. The money supply is 500 and currency held by the public equais bank reserves. The
desired reserve-deposit ratio is 0.25. Find currency held by the public and bank reserves.
c. The money supply is 1.250, of which 250 is currency held by the public. Bank reserves
are 100. Find the desired teserve-deposit ratio.
Transcribed Image Text:1. Answer each of the following questions. a. Bank reserves are 100, the public holds 200 in currency, and the desired reserve-deposit ratio is 0.25. Find deposits and the money supply. b. The money supply is 500 and currency held by the public equais bank reserves. The desired reserve-deposit ratio is 0.25. Find currency held by the public and bank reserves. c. The money supply is 1.250, of which 250 is currency held by the public. Bank reserves are 100. Find the desired teserve-deposit ratio.
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