Given the following information Reserve requirement for demand deposits Cash in circulation Demand Deposits Money Market Deposits Reserves loaned from Central Bank = 12% = RM 210 millions = RM 574 millions = RM287 millions = RM 15 millions = RM94 millions Non-loan reserves in Central Bank Excess Reserves = RM 0.96 millions Assume that the money market deposit is not subject to reserve requirements. Calculate the value of money multiplier for M1 and M2 2. 1. If you wish that the Central Bank will expand its monetary base (M1) so money supply (M1) would grow by 3% over the next one year, how much should the monetary base change in order to realise the changes?

Given the following information Reserve requirement for demand deposits Cash in circulation Demand Deposits Money Market Deposits Reserves loaned from Central Bank = 12% = RM 210 millions = RM 574 millions = RM287 millions = RM 15 millions = RM94 millions Non-loan reserves in Central Bank Excess Reserves = RM 0.96 millions Assume that the money market deposit is not subject to reserve requirements. Calculate the value of money multiplier for M1 and M2 2. 1. If you wish that the Central Bank will expand its monetary base (M1) so money supply (M1) would grow by 3% over the next one year, how much should the monetary base change in order to realise the changes?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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