Suppose that at the end of December 2009, Federal Reserve notes were $600 billion, the quantity of coins was $30 billion, and the monetary base in the United States was $645billion.Calculate the banks' reserves at the Fed.Banks' reserves at the Fed are $ billion.C

Answered: Suppose that at the end of December…

ENGR.ECONOMIC ANALYSIS

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Chapter1: Making Economics Decisions

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Suppose that at the end of December 2009, Federal Reserve notes were $600 billion, the quantity of coins was $30 billion, and the monetary base in the United States was $645
billion.
Calculate the banks' reserves at the Fed.
Banks' reserves at the Fed are $ billion.
C

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The monetary base includes the entire amount of a currency that is either in the form of commercial bank deposits held in the Fed's reserves or in general circulation in the public hands. Thus the monetary base means the amount of cash circulating in the economy. It will be composed of the currency in circulation as well as the bank

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