1. Let's construct a numerical example with realistic numbers for the following variables: required reserve ratio = 0.1; currency in circulation = $1200; demand(checkable) de- pisits = $1600; excess reserves = $2500; money supply = $2800. What are the currency ratio, excess reserves ratio, and money multiplier? %3D %3!
1. Let's construct a numerical example with realistic numbers for the following variables: required reserve ratio = 0.1; currency in circulation = $1200; demand(checkable) de- pisits = $1600; excess reserves = $2500; money supply = $2800. What are the currency ratio, excess reserves ratio, and money multiplier? %3D %3!
Chapter25: Money Creation
Section: Chapter Questions
Problem 9SQP
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Transcribed Image Text:1. Let's construct a numerical example with realistic numbers for the following variables:
required reserve ratio = 0.1; currency in circulation = $1200; demand(checkable) de-
pisits = $1600; excess reserves = $2500; money supply = $2800. What are the currency
ratio, excess rescrves ratio, and money multiplier?
2. What is your thought on Bitcoin? Will Bitcoin be the new money? (Max 500 words)(Open
question)
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