his exercise is based on the following simplified model of the determination of the money stock. M = C + D C = 0.2 D R = 0.1 D H = R + C where M - money stock C - currency in circulation R - bank reserves D - deposits of the public H - high-powered money If the money stock were $192 billion, what would bank reserves have to be?
his exercise is based on the following simplified model of the determination of the money stock. M = C + D C = 0.2 D R = 0.1 D H = R + C where M - money stock C - currency in circulation R - bank reserves D - deposits of the public H - high-powered money If the money stock were $192 billion, what would bank reserves have to be?
Chapter19: Money Creation
Section: Chapter Questions
Problem 4SQP
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This exercise is based on the following simplified model of the determination of the money stock.
M = C + D
C = 0.2 D
R = 0.1 D
H = R + C
where M - money stock
C - currency in circulation
R - bank reserves
D - deposits of the public
H - high-powered money
If the money stock were $192 billion, what would bank reserves have to be?
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