Analyze the following situations in the light of one of the topics of “Big Ideas simply explained” textbook “Make Money from Money”: 1. Alvonia is an alien country that has seen little financial innovation. Its central bank requires commercial banks to keep 100% of their deposits as reserves. Calculate the money multiplier for this economy. 2. Bolumbia is run by a dictator who knows no economics and is not willing to listen to any advice. He thinks he can always print money whenever adepositor wants to withdraw so he does not think having any requiredreserve ratio for the sole bank of the country is necessary. What could bethe consequences?

Q: 7.Yesterday Bank A had no excess reserves. Today it received a new deposit of $ 4,000. a. If the…

A: Hi, according to our guidelines we are allowed to answer only one question with three sub-divisions…

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A:

Q: Most people in the country of Classica tend to keep $3 out of every $100 of their cash holdings in…

A: Reserves in deposits = 4% Total Wallet reserves = (3/100)*100 = 3% If total deposits is equal to 100…

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A: Since you have posted a question with multiple sub-parts, we will solve the first three sub-parts…

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A: Hello, thank you for the question. Since there are multiple questions asked here, only the first…

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A: For answering this question, we will analyse each of the given options separately.

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Q: size of bank reserves (R)? What is the money multiplier? What is the money supply? What is the…

A: R ($ trillion) = B - C = 3.7 - 1.2 = 2.5 Money multiplier (mm) = (1 + cr) / (cr + rr) = (1 + 0.25) /…

Q: Using the quantity Theory of Money formula, suppose that in 2020: Money supply = $50 Billion;…

A: Here, we calculate the given as follow;

Q: The central bank of Barbados decides to pursue an expansionary monetary policy of reserve…

A: please find the answer below.

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A: Hi, thanks for the question. As per the guidelines, we are allowed to attempt the first three…

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A: Answer- Given in the question- “Forcing nonborrowed reserves to decline when above target led…

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A: The federal reserve is the central bank of the United States and it works with the objective of…

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A: Here, we calculate the given as follow;