Assume that the public wants to keep 15% of its total money balances in cash and the rest in bank deposits, with banks holding cash reserves equal to 12% of the deposits. For a total money supply of $ 200 billion, how much cash will be required for use by both banks and the general public?
Assume that the public wants to keep 15% of its total money balances in cash and the rest in bank deposits, with banks holding cash reserves equal to 12% of the deposits. For a total money supply of $ 200 billion, how much cash will be required for use by both banks and the general public?
Chapter13: The Federal Reserve System
Section: Chapter Questions
Problem 6QP
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Assume that the public wants to keep 15% of its total money balances in cash and the rest in bank deposits, with banks holding cash reserves equal to 12% of the deposits. For a total money supply of $ 200 billion, how much cash will be required for use by both banks and the general public?
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