Assume that the currency-deposit ratio is 0.5, the required reserve ratio is 0.1, and the excess reserves to deposit ratio is 0.15. If the monetary base is $2 trillion, find (a) the amount of currency in circulation in billions of dollars; (b) required reserves in billions of dollars (c) excess reserves in billions of dollars.
Assume that the currency-deposit ratio is 0.5, the required reserve ratio is 0.1, and the excess reserves to deposit ratio is 0.15. If the monetary base is $2 trillion, find (a) the amount of currency in circulation in billions of dollars; (b) required reserves in billions of dollars (c) excess reserves in billions of dollars.
Chapter12: Money, Banking And The Financial System
Section: Chapter Questions
Problem 5WNG
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Assume that the currency-deposit ratio is 0.5, the
(a) the amount of currency in circulation in billions of dollars;
(b)
(c) excess reserves in billions of dollars.
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