The desired reserve ratio is 10 percent of deposits, and the currency drain ratio is 1 percent of deposits The central bank makes an open market purchase of $3 million of securities. Calculate the change in the quantity of money. How much of the new money is currency and how much is bank deposits? >>> Answer to 2 decimal places The quantity of money changes by $27.55 million. of the new money created, million is bank deposits

The desired reserve ratio is 10 percent of deposits, and the currency drain ratio is 1 percent of deposits The central bank makes an open market purchase of $3 million of securities. Calculate the change in the quantity of money. How much of the new money is currency and how much is bank deposits? >>> Answer to 2 decimal places The quantity of money changes by $27.55 million. of the new money created, million is bank deposits

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter21: The Monetary System

Section: Chapter Questions

Problem 12PA

See similar textbooks

Similar questions

Give typing answer with explanation and conclusion
Jone currently has $6,000 in her savings account and $2,000 in her checking account at the local bank. Instructions: Use a positive number to represent an increase and a negative number to represent a decrease. a. Suppose she withdraws $550 in cash from her savings account. By what dollar amount does the countrys money supply (M and M2) change as a result of Jane's actions? Change in M: $ Change in M2$ b. Now suppose instead that Jane withdraws $550 from her checking account and uses $330 of this money to pay her federal income tax. After that, she uses $140 to buy a set of used golf clubs from her neighbor who deposits it into his checking account. Finally, she deposits the remaining cash from the $550 withdrawal into her savings account. By what dollar amount does the country's money supply change as a result of Jene's actions? Change in Mt: $ Change in M2: $
The desired reserve ratio is 1 percent of deposits, and the currency drain ratio is 2 percent of deposits. The central bank makes an open market purchase of $4 million of securities. Calculate the change in the quantity of money. How much of the new money is currency and how much is bank deposits? >>> Answer to 2 decimal places. ..... The quantity of money changes by 5 million.
Which of the following aren’t counted in the money supply of the US? a.Coins b.Travelers checks c.Commodities d.Debit accounts e. Currency
10
Give typing answer with explanation and conclusion Consider country A, which uses a fixed exchange rate system pegging its currency value against the US dollars and has perfect capital mobility. In the short run, if the U.S. central bank, the Federal Reserve Board of the U.S., lowers the money supply of the U.S., then Select one: a. The Reserve Bank of Country A would have to lower its money supply. b. The Reserve Bank of Country A would have to raise its money?
I need help with this hw
Which of the following is true about money in the colonies? O Whether with friends or strangers, people found bartering to be convenient O Thomas Jefferson thought the use of money was oppressive O Money tended to change in such a way as to ease and thereby promote commerce O There was no such thing as commodity money or fiat money
1. When a central bank sterilizes a foreign exchange purchase, it offsets the purchase with a. an open market purchase to increase the money supply b. an open market sale to decrease the money supply c. an open market purchase to keep the money supply from changing d. an open market sale to keep the money supply from changing
Indicate which of the functions of money (a medium of exchange, a unit of account, and a store of value) each of the following performs in the U.S. economy. Check all that apply. Plastic credit card Picasso painting Mexican peso Demand deposit Plastic credit card Picasso painting Mexican peso Medium of Exchange Unit of Account Given your answers to the previous task, indicate whether each of the following is considered money in the U.S. economy. Money Yes No Demand deposit 0 0 0 0 Store of Value 0 0 0 0
#27. Identify two examples of commodity money. #28. The U.S. dollar is an example of fiat money. What is fiat money? #29. Why can fiat money be successfully used as a currency despite the fact that it has not intrinsic value backing it up?
Indicate which of the functions of money (a medium of exchange, a unit of account, and a store of value) each of the following performs in the U.S. economy. Check all that apply. Medium of Exchange Unit of Account Store of Value U.S. dollar bill British pound Picasso painting Plastic credit card Given your answers to the previous task, indicate whether each of the following is considered money in the U.S. economy. Money Yes No U.S. dollar bill British pound Picasso painting Plastic credit card