Use the following data to answer the below question. Required reserve $50 Checkable deposits $500 Savings Deposits $50 Excess reserves $180 Currency held by the public $160 The money multiplier is 1.69 The Fed conducts an open market purchase of $85. What will be the change in the money supply $answer? /Round to 2 decimal places/ What is the change in checkable deposits?

Use the following data to answer the below question. Required reserve $50 Checkable deposits $500 Savings Deposits $50 Excess reserves $180 Currency held by the public $160 The money multiplier is 1.69 The Fed conducts an open market purchase of $85. What will be the change in the money supply $answer? /Round to 2 decimal places/ What is the change in checkable deposits?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Suppose the Federal Reserve set the reserve requirement at 20%. Assume that banks lend all reserves that are not required to be held. Instructions: Round your answers to two decimal places. a. Complete the table below based on this information. Fractional Reserve Banking Transaction Sean receives $1,000 in cash and deposits the funds into his checking account. Sean's bank loans Maria all reserves that are not required to be held. Maria's bank loans Jackson all reserves that are not required to be held. Transaction Sean receives $1,000 in cash and deposits the funds into his checking account. Sean's bank loans Maria all reserves that are not required to be held. Deposit Maria's bank loans Jackson all reserves that are not required to be held. $1,000.00 Jackson's bank loans Paul all reserves that are not required to be held. Total Money Created by Transactions b. Suppose Instead that the reserve requirement is 15%. Complete the table using the new reserve requirement. Fractional Reserve…
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Use the math you've just learned to calculate the money multiplier when the currency drain ratio is 0.1 and the desired reserve ratio is 0.01. The money multiplier is ___
Give typing answer with explanation and conclusion If the monetary base increases by $1 million and the quantity of money increases by $2.5 million, then the money multiplier is _
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If you have the following data The monetary Items Value in M. Currency in circulation, 675 Demand deposits, 1500 Excess reserves, 100 required reserve, 0.1 Find the following: Money supply M1 The currency ratio, c The excess reserve ratio, er The money multiplier m
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Use the following table to determine the levels of M1 and M2 In the United States. Money Categories in the United States Asset Currency Demand deposits Money market funds other checkable deposits Savings deposits Small time deposits Traveler's checks $ Instructions: Enter your answers as a whole number. a. Calculate the M1 money supply. billion b. Calculate the M2 money supply. Amount (billions of dollars) $89 86 47 40 481 billion 6
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