Answered: Assume bank reserves = $800 billion,…

Assume bank reserves = $800 billion, currency = $600 billion, (R/D) = 0.8, and rã = 0. What is the value of the money multiplier? OA. 0.875

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

It is not 1.6. I have tried that. It is either A, B, or D.

Assume bank reserves =
$800 billion, currency = $600 billion, (R/D) = 0.8, and r₁=0.
What is the value of the money multiplier?
A. 0.875
B. 1.14
C. 1.6
D. 2.0

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