The desired reserve ratio is 10 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 $ 34.0 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 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 $ 34.0 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
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![The desired reserve ratio is 10 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 $ 34.0 million.
of the new money created, $ million is bank deposits.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F178cd46b-548e-4d9c-b1fc-a99a94af4a66%2F548214bf-3ccd-4c70-be8d-fb7450bc5585%2F0vfqozd_processed.jpeg&w=3840&q=75)
Transcribed Image Text:The desired reserve ratio is 10 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 $ 34.0 million.
of the new money created, $ million is bank deposits.
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