Question

Suppose that currency in circulation is $800 billion, the amount of checkable deposits is $1200 billion, the required reserve

Please Please answer if you are Expert and you know the answer 100% correct. Also, please include the Fred graph, and send the graph link and explain how to get the graph as you got it. thank you

0 0
Add a comment Improve this question Transcribed image text
Answer #1

a) Money supply: MEC + D .currency Deposit =(800+1280) billion = 2000 B werency to deposit (cd) - soo doo 2 Excess reserve na

M1 Money Multiplier, Ratio, Annual, Seasonally Adjusted 2.000 1.800 1.600 1.400 1.200 1.000 0.800 0.600 0.400 0.200 0.000 201

This is exactly the scenario given in part (d).

Add a comment
Know the answer?
Add Answer to:
Please Please answer if you are Expert and you know the answer 100% correct. Also, please...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
  • 1. Suppose that currency in circulation is $600 billion, the amount of checkable deposits is $900...

    1. Suppose that currency in circulation is $600 billion, the amount of checkable deposits is $900 billion, required reserve on checkable deposits is 10% and excess reserves are $15 billion. a. Calculate the money supply, the currency deposit ratio, the excess reserve ratio, and the money multiplier. Suppose the central bank conducts an unusually large open market purchase of bonds held by banks of $1400 billion due to a sharp contraction in the economy. Assuming the ratios, you calculated in...

  • Answer Part B please 2. Suppose that currency in circulation is $600 billion, the amount of...

    Answer Part B please 2. Suppose that currency in circulation is $600 billion, the amount of chequable deposits is $900 billion, excess reserves are $15 billion, and the desired reserve ratio ra is 10%. a. Calculate the money supply, the currency deposit ratio, the excess reserve ratio, and the money multiplier. b. Suppose the central bank conducts an unusually large open market purchase of bonds held by banks of $1400 billion due to a sharp contraction in the economy. Assuming...

  • Question 1. (15 points) Suppose that currency in circulation is $600 billion, the amount of chequable...

    Question 1. (15 points) Suppose that currency in circulation is $600 billion, the amount of chequable deposits is $900 billion, and excess reserves are $15 billion and the desired reserve ratio is 10%. a. Calculate the money supply, the currency deposit ratio, the excess reserve ratio, and the money multiplier. b. Suppose the central bank conducts an unusually large open market purchase of bonds held by banks of $1400 billion due to a sharp contraction in the economy. Assuming the...

  • 2. Let's assume that in a hypothetical economy currency in circulation is $600 billion, the amoun...

    2. Let's assume that in a hypothetical economy currency in circulation is $600 billion, the amount of checkable deposits is $900 billion, excess reserves are $15 billion and required reserve ratio is 10%. a. Calculate money supply, currency to deposit ratio, excess reserve ratio and money multiplier. b. Suppose Fed conducts very large open market purchase of $1400 billion due to a sharp recession. Assuming the ratios hold, what will be the effect on money supply? c. Now suppose the...

  • Discussion Questions for Tuesday, Apr. 23 1. Suppose the Fed conducts $10 million open market pur...

    Discussion Questions for Tuesday, Apr. 23 1. Suppose the Fed conducts $10 million open market purchase from Bank A. If Bank A and all the other banks use reserves to purchase only securities, what will happen to deposits in the banking system and how much does it expand? 2. Let's assume that in a hypothetical economy currency in circulation is $600 billion, the amount of checkable deposits is $900 billion, excess reserves are $15 billion and required reserve ratio is...

  • 6. If reserves in the banking system increase by $100, then checkable deposits will increase by...

    6. If reserves in the banking system increase by $100, then checkable deposits will increase by $400 in the simple model of deposit creation when the required reserve ratio is eserve retioKeserves De posi+s 7. If the required reserve ratio is one-third, curreney in circulation is $300 billion, checkable deposits are $900 billion, and there is no excess reserve, then the MI money multiplier is 8. If the required reserve ratio is 10 percent, currency in circulation is $400 billion,...

  • I know the answer, but i don’t know how to calculation.

    I know the answer, but i don’t know how to calculation. 1) If bank reserves are 200, the public holds 400 in currency, and the desired reserve/deposit ratio is 0.25, the deposits are and the money supply is_ 2) The money supply in Macroland is currently 2,500, bank reserves are 200, currency held by public is 500, and banks' desired reserve/deposit ratio is 0.10. Assuming the values of the currency held by the public and the desired reserve/deposit ratio do...

  • 7. A decrease in the nonborrowed monetary base, everything else hela constant( the multiplier the same)...

    7. A decrease in the nonborrowed monetary base, everything else hela constant( the multiplier the same) will cause the money supply D. Demand deposits to rise 8. Everything else held constant, a decrease in excess reserves will he money supply to rise c No change in will cause A. The money supply to rise B. The money supply to remain constant C. The money supply to fall D. Checkable deposits to rise 9. If the required reserve ratio is 15...

  • 1) Suppose the Fed's required reserve ratio (REQ) is 20%. Further suppose that the Fed buys...

    1) Suppose the Fed's required reserve ratio (REQ) is 20%. Further suppose that the Fed buys $100 million of U.S. Treasury securities from a dealer, Mary Jones, who deposits the check, which is drawn on the Fed, in her bank. This deposit increases her bank's reserve account (∆R) with the Fed by $100 million as well as its demand deposits, its total reserves, and the overall level of M1. What is the money multiplier?1) Suppose the Fed's required reserve ratio...

  • Back to Aset Attempts: Average: 2 2. The Bank of Canada and the money supply Suppose...

    Back to Aset Attempts: Average: 2 2. The Bank of Canada and the money supply Suppose the money supply (as measured by chequable deposits) is currently $900 billion. The required reserve ratio is 30%. Banks hold $270 billion in reserves, so there are no excess reserves. The Bank of Canada wants to increase the money supply by $10 billion, to $910 billion. It could do this through open-market operations or by changing the required reserve ratio. Assume for this question...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT