Suppose Hong Kong's money supply data as at 31 Dec 2016 and 31 Dec 2017 were as follows: 31 Dec 2017 ($ billion) 107 Total legal tender issued Legal tender held by all deposit-taking institutions Demand deposits Deposits with licensed banks Negotiable certificates of deposit (NCDs) issued by licensed banks and held by the public Deposits with restricted licence banks (RLBs) and deposit-taking companies (DTCs) NCDs issued by RLBS and DTCS NCDs issued by RLBS and DTCS and held by the public 31 Dec 2016 ($ billion) 100 25 200 600 150 180 120 40 30 201 606 151 182 120 42 375:06 ha. Calculate the changes in the monetary base and the money supply M1 from 31 Dec 2016 to 31 Dec 2017, respectively. e ar b. On a certain day, some customers withdrew $30 billion from their savings deposits. They used $10 billion to buy NCDs from restricted licence banks, deposited $15 billion into their time deposit accounts with licensed banks and held the remaining $5 billion in cash. How did the above transactions affect money supply M1, M2 and M3, respectively?
Suppose Hong Kong's money supply data as at 31 Dec 2016 and 31 Dec 2017 were as follows: 31 Dec 2017 ($ billion) 107 Total legal tender issued Legal tender held by all deposit-taking institutions Demand deposits Deposits with licensed banks Negotiable certificates of deposit (NCDs) issued by licensed banks and held by the public Deposits with restricted licence banks (RLBs) and deposit-taking companies (DTCs) NCDs issued by RLBS and DTCS NCDs issued by RLBS and DTCS and held by the public 31 Dec 2016 ($ billion) 100 25 200 600 150 180 120 40 30 201 606 151 182 120 42 375:06 ha. Calculate the changes in the monetary base and the money supply M1 from 31 Dec 2016 to 31 Dec 2017, respectively. e ar b. On a certain day, some customers withdrew $30 billion from their savings deposits. They used $10 billion to buy NCDs from restricted licence banks, deposited $15 billion into their time deposit accounts with licensed banks and held the remaining $5 billion in cash. How did the above transactions affect money supply M1, M2 and M3, respectively?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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