Homework Answers
Answer 4:
1. Currency in Circulation - Increase in the trend of online shopping these days has reduced the demand for money for transaction purposes, thus, currency to deposit ratio of the economy has fallen which leads to fall in the currency in circulation in the economy.
2. Bank reserves: As the currency held with the public declines, demand for money declines which increases the level of bank reserves of commercial banks in the economy.
3. The monetary base: Monetary base = Currency in circulation + banker's deposits with commercial banks + Other deposits with Central Bank. Fall in the level of currency in circulation will reduce the monetary base of the economy.
4. The money supply : As monetary base of the economy falls, the impact of increase in money supply declines and thus overall money supply will decrease in economy with the fall in the level of currency circulation.
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I know the answer, but i don’t know how to calculation.
I know the answer, but i don’t know how to calculation.
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I know the answer, but i don’t know how to calculation.
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of a closed economy. when 6. According to the classical long-run macroeconomic model of a co decrease and government spending is unchanged a consumption and investment both increase b. consumption and investment both decrease c consumption increases and investment decreases d. consumption decreases and investment increases. 7. Suppose a business-friendly billionaire becomes president. As a result, businesses become optimistic about the future and more eager than before to increase their investment spending According to the classical long-run macroeconomic model of...
ECON2313 hw4 2019b View Review Mailings yout References AatbCeDE AaßbCcD: AalbCcDd E AaBb Aasb AaltbCeDdE Ap 4 A Aa Su Tele Heading 21 Headng 1 No Spacing Nerml A A Part II. Short Answer Questions 1. Explain how each of the following events affects the monetary base, the money multiplier, and the money supply. a. The Fed increases the interest rate it pays banks for holding reserves. When the Fed increases the interest rate, it pays banks to hold reserves....
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