The monetary supply of Moneyland is $600 million. The current-deposit ratio (cr) is 0.2 and reserve-deposit ratio (rr) is 0.2. Calculate the money multiplier and monetary base.
The monetary supply of Moneyland is $600 million. The current-deposit ratio (cr) is 0.2 and reserve-deposit...
Suppose the monetary base is $100. If the currency-deposit ratio is 0.20 and the reserve-deposit ratio is 0.10, calculate the money multiplier and total money supply.
Suppose the monetary base is $500 million, the required reserve ratio is 12%, and the currency-deposit ratio is 30%. What would the excess reserve ratio need to be to produce $800 million in the money supply. Holding everything else constant, what effect would an increase in the excess reserve ratio have on the money supply?
13. Suppose the monetary base is B = $800 billion, the reserve-deposit ratio is rd = 0.1, and the currencydeposit ratio is cd = 0.8. Calculate the value of the currency circulating in the economy (C). a. $89 billion b. $711 billion c. $889 billion d. $1,600 billion 14. Suppose the monetary base is B = $800 billion, the reserve-deposit ratio is rd = 0.1, and the currencydeposit ratio is cd = 0.8. Calculate the money multiplier (m). a. 0.5...
How does the reserve ratio change if the Fed increases the required reserve ratio? How does the currency-deposit ratio change if people decide to keep more of their money in cash rather than depositing it? If people decide to hold zero currency (, meaning the currency- deposit ratio goes to zero), what is the relationship between the money supply and the monetary base (what is the money multiplier)? If people decide to hold all of their money as currency and...
3) In a country A, the monetary base is $1,000. People hold one third of their money in the form of currency and thus two-thirds as bank deposits. Banks hold a third of their deposits in reserve. (a) What are the reserve-deposit ratio (rr), currency-deposit ratio (cr), money supply (M), and the money multiplier (m)? (b) One day, fear about the banking system strikes the population, and people now want to hold half of their money in the form of...
The Monetary System - Work It Out: Question 2 In the economy of Robberia, the monetary base is $2500. People hold 50% of their money in the form of currency (and thus 50% as bank deposits). Banks hold 15% of their deposits in reserve. a. What are the reserve-deposit ratio, the currency-deposit ratio, the money multiplier, and the money supply? The reserve-deposit ratio equals The currency-deposit ratio equals The money multiplier equals The money supply equals
5. If the required reserve ratio is 10% and there is an initial deposit of $600, using the simple money multiplier, what is the maximum money created?
I know that the money supply (MS) = money multiplier (m) * the monetary base (B). MS=m*B B is constant, so changes in m will influence the money supply. I know that m = (cr+1)/(cr+rr). Now, the answer given to us was C. However, wouldn't an increase in cr increase m, not decrease m? For example, say rr is fixed at 2 (the number is arbitrary since it's fixed) and cr is initially 5. Then m = 6/7. If cr...
Which statement best describes the outcomes of a decrease in reserve requirements? The reserve ratio increases, the money multiplier decreases, and the money supply decreases. The reserve ratio decreases, the money multiplier decreases, and the money supply decreases. The reserve ratio decreases, the money multiplier increases, and the money supply increases. The reserve ratio increases, the money multiplier increases, and the money supply increases. Question 16 (1 point) Suppose the reserve ratio is 10 percent and banks do not hold...
Suppose that r = required reserve ratio = 0.20 c = {C/D} = currency ratio = 0.45 e = {ER/D} = excess reserves ratio = 0.01 t = {T/D} = time deposit ratio = 1 mm = {MM/D} = money market fund ratio = 0.70 MB = the monetary base = $1,000 billion 1 + C + + mm Given that the formula for the M2 money multiplier is m, = - -, find the value for the M2 money...