Pls help with below homework, answer both questions.

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
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Pls help with below homework, answer both questions.

Banks in Ruritania have a required reserve ratio of 8%. Round all answers to one place after the decimal.
What is the simple money multiplier?
simple money multiplier:
Money leakages, however, are quite high. Required reserves and leakages amount to 33% of deposits. What is the Jeakage-
adjusted money multiplier?
leakage-adjusted money multiplier
If a financial crisis develops in Ruritania, with numerous loans going into default, is the money multiplier likely to increase
or decrease?
If a financial crisis develops in Ruritania, with numerous loans going into default, is the money multiplier likely to increase
or decrease?
O increase
O decrease
Which example does not represent a leakage from the money multiplier process?
O excess reserves
O cash held by the Fed
O cash held by individuals
O cash held by foreigners
Transcribed Image Text:Banks in Ruritania have a required reserve ratio of 8%. Round all answers to one place after the decimal. What is the simple money multiplier? simple money multiplier: Money leakages, however, are quite high. Required reserves and leakages amount to 33% of deposits. What is the Jeakage- adjusted money multiplier? leakage-adjusted money multiplier If a financial crisis develops in Ruritania, with numerous loans going into default, is the money multiplier likely to increase or decrease? If a financial crisis develops in Ruritania, with numerous loans going into default, is the money multiplier likely to increase or decrease? O increase O decrease Which example does not represent a leakage from the money multiplier process? O excess reserves O cash held by the Fed O cash held by individuals O cash held by foreigners
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