Assume that the following data describe the condition of the banking system: Total reserves Transactions deposits Cash held by public Reserve requirement $120 billion $800 billion $300 billion 0.10

Economics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN:9781305506725
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Chapter14: Modern Macroeconomics And Monetary Policy
Section: Chapter Questions
Problem 2CQ
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Assume that the following data describe the condition of the banking system:
Total reserves
Transactions deposits
Cash held by public
Reserve requirement
$120 billion
$800 billion
$300 billion
0.10
Suppose the Fed wanted to stop further lending activity. To do this, what reserve requirement should the Fed impose?
Instructions: Round your response to three decimal places.
Transcribed Image Text:Assume that the following data describe the condition of the banking system: Total reserves Transactions deposits Cash held by public Reserve requirement $120 billion $800 billion $300 billion 0.10 Suppose the Fed wanted to stop further lending activity. To do this, what reserve requirement should the Fed impose? Instructions: Round your response to three decimal places.
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