Following are the hypothetical data for two countries: Currency to Deposit Ratio in Country A= 0.5; Currency to Deposit Ratio in Country B= 0.6; Reserve to Deposit Ratio in Country A=0.2; Reserve to Deposit Ratio in Country B=0.4. a) If the initial deposit is $2000 in each country, which country would have greater money supply? b) Which country has a more favourable household behaviour from the point of view of money creation? * O A, A O B, B O A, B O B, A

Following are the hypothetical data for two countries: Currency to Deposit Ratio in Country A= 0.5; Currency to Deposit Ratio in Country B= 0.6; Reserve to Deposit Ratio in Country A=0.2; Reserve to Deposit Ratio in Country B=0.4. a) If the initial deposit is $2000 in each country, which country would have greater money supply? b) Which country has a more favourable household behaviour from the point of view of money creation? * O A, A O B, B O A, B O B, A

Macroeconomics: Principles and Policy (MindTap Course List)

13th Edition

ISBN:9781305280601

Author:William J. Baumol, Alan S. Blinder

Publisher:William J. Baumol, Alan S. Blinder

Chapter19: The International Monetary System: Order Or Disorder

Section: Chapter Questions

Problem 8DQ

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A10