Assume no change in currency holdings as deposits change. A banking system with target reserve ratio is 0.05 starts with no excess reserves. If the central bank purchases $200 in government bonds from commercial banks, what will be the ultimate change in money supply (when banks return to having no excess reserves)? (Round to two decimal places and do not enter the currency symbol. If your answer is $6.114, enter 6.11. If your answer is $6.115, enter 6.12. If appropriate, remember to enter the - sign.)

Assume no change in currency holdings as deposits change. A banking system with target reserve ratio is 0.05 starts with no excess reserves. If the central bank purchases $200 in government bonds from commercial banks, what will be the ultimate change in money supply (when banks return to having no excess reserves)? (Round to two decimal places and do not enter the currency symbol. If your answer is $6.114, enter 6.11. If your answer is $6.115, enter 6.12. If appropriate, remember to enter the - sign.)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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