Md=RY(0.5-i) Where RY is nominal income and (0.5-i) is a function of the i, Ratio of currency to total money demand is 30%, the fraction of checkable deposits held as reserves is 20%, High powered money is R 100 million, Real income is equal to 400 million and the price index is equal to 150. With all values rounded-off to two decimal places, which of the following is/are correct? The equilibrium interest rate is 15%. At equilibrium, checkable deposits are equal to R 159.6 million. If the monetary base increases to 300, the money supply will increase by R 454. If the households decide to hold no currency, the total demand for central bank money will be given as Hd= 0.1[300 – 600i]
Md=RY(0.5-i) Where RY is nominal income and (0.5-i) is a function of the i, Ratio of currency to total money demand is 30%, the fraction of checkable deposits held as reserves is 20%, High powered money is R 100 million, Real income is equal to 400 million and the price index is equal to 150. With all values rounded-off to two decimal places, which of the following is/are correct? The equilibrium interest rate is 15%. At equilibrium, checkable deposits are equal to R 159.6 million. If the monetary base increases to 300, the money supply will increase by R 454. If the households decide to hold no currency, the total demand for central bank money will be given as Hd= 0.1[300 – 600i]
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
Chapter13: Money And The Banking System
Section: Chapter Questions
Problem 8CQ
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Md=RY(0.5-i) Where RY is nominal income and (0.5-i) is a function of the i, Ratio of currency to total money
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