Suppose Jeff Bezos deposits $1 million in currency in his checking account on the Moon. Calculate...
Suppose Jeff Bezos deposits $1 million in currency in his checking account on the Moon. Calculate the change in the money supply on the Moon that follows this deposit.
Homework Answers
Money supply = money multiple * monetary base ( which include checking account)
Let money multiplier = arbitrary no. M
So monetary base increase by $ 1 million
Hence money supply will increase by $1 million * m
If m = 5 then money supply increase by $5 million
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