In the economy of Waco, the monetary base is $3150. People hold 30% of their money in the form of currency (and thus 70% as bank deposits). Banks hold 15% of their deposits in reserve. What are the reserve‑deposit ratio, the currency‑deposit ratio, the money multiplier, and the money supply?
In the economy of Waco, the monetary base is $3150. People hold 30% of their money in the form of currency (and thus 70% as bank deposits). Banks hold 15% of their deposits in reserve. What are the reserve‑deposit ratio, the currency‑deposit ratio, the money multiplier, and the money supply?
Economics (MindTap Course List)
13th Edition
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Roger A. Arnold
Chapter13: The Federal Reserve System
Section: Chapter Questions
Problem 5WNG
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In the economy of Waco, the monetary base is $3150. People hold 30% of their money in the form of currency (and thus 70% as bank deposits). Banks hold 15% of their deposits in reserve.
What are the reserve‑deposit ratio, the currency‑deposit ratio, the money multiplier, and the money supply?
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