Q.18 For the economy where MS CC+ DD where CC= cDD and R=SDD+eDD. eDDmeasures extra reserves deposited in CB as per requirement. The money multiplier is equal to:c+8+ec+1D.c+8A.В.C.1+c1+c+81+cc+8+eE.None of the above is correctQ.19 Suppose that IS and LM curves are negatively and positively sloped respectively. Apoint below both IS and LM curve means thatА.Demand for money is greater than supply of money and demand for goods is less thansupply of goods.B.Demand for goods is greater than supply of goods and demand for money is less thansupply of:moneyC.Demand for money is less than supply of money and demand for goods is less thansupply of goodsDemand for goods is less than supply of goods and demand for money is equal to supplyof meneyD.E.none of the above

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Q.18 For the economy where MS CC+DD where CC=cDD and R = SDD+eDD. eDD measures extra reserves deposited in CB as per requirement. The money multiplier is equal to: c+8 c+8+e c+1 D. c+8 1+c А. В. С. 1+c+8 1+c c+ổ+e Е. None of the above is correct E.

Q.18 For the economy where MS CC+DD where CC=cDD and R = SDD+eDD. eDD measures extra reserves deposited in CB as per requirement. The money multiplier is equal to: c+8 c+8+e c+1 D. c+8 1+c А. В. С. 1+c+8 1+c c+ổ+e Е. None of the above is correct E.

Economics:

10th Edition

ISBN:9781285859460

Author:BOYES, William

Publisher:BOYES, William

Chapter12: Money And Banking

Section: Chapter Questions

Problem 13E

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Q.8 “Cash is an important asset.” Which function of money is this statement related to? ((1) medium of exchange; (2) unit of account; or (3) store of value.) Q.9 You transfer $100 dollars from your checking account to your savings account. How much does M1 increase or decrease? How much does M2 increase or decrease? Q.10 If rr = 20%, how large is the money multiplier? If MPC = 0.8, how large is the spending multiplier? Q. 11 The government lends money to firms to buy machines, this policy is related to which factor of economic growth? ((1) natural resources; (2) physical capital; (3) human capital; (4) technology; or (5) institutions.)
3 Please Answer the following two Economics Questions: 1. Consider an economy where the ratio of required reserves to bank deposits isr = 0.15, the ratio of currency holdings to deposits is c = 0.2, the ratio of bankexcess reserves to deposits is e = 0.25 and the monetary base is 100. Showhow to calculate the value of the M1 money multiplier predicted by the moneymultiplier model. Explain your answer 2. If monetary velocity is 5, the GDP price deflator equals 2 and real GDP is 250,what is the money supply? Explain your answer
Assuming initially that rr=10%, c=40%, and e=0, what would happen to the M1 money multiplier if there was an increase in rr to 15%.
Assume that the money multiplier m = (1+c)/(r+e+c). Where c is the currency deposit ratio, e is the excess reserve ratio and r is the required reserve ratio.a) With examples, explain what will cause an increase in the ratios c, e and rb) Explain the implications of an increase in each of the ratios on the ability of thecentral bank to increase money supply by increasing the monetary base.c) Assume that consumers trust in the banking sector improves because of more transparent banking practices. How will this affect the money multiplier and the central bank’s monetary control?
Suppose that the demand for money function was MD = 4Y − 1000i where MD is the quantity of money demanded, i is the rate of intest (an interest of 5 means 5 percent in this problem), and Y is real national income, which currently is 1500. The supply of money is 1000, currency in circulation outside the banking system is 100, the target reserve ratio is 10 percent, there is no cash drain in the banking system, and the recessionary gap is 250. The price level does not change in this problem. What is the level of cash reserve of the banking system?
Suppose that an economy has 30B in reserves (both required and excess reserves), depositsare 120B, the currency ratio is 5% and the required reserve ratio is 13%.What is the monetary Base? What is the money supply? What is the money multiplier?
Which volume of OMOs is required to keep money supply unchanged, if demand for borrowedreserves increases by $0.5 trillion and the central bank decreases required reserves ratio from 10 to7% (the volume of required reserves created by the banking system was 1.5 trillion)? Use the conceptof a money multiplier and currency ratio of 0.2 and excess reserves ratio of 0.03.
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Q)Suppose that the money multiplier is originally equal to 3. However, due to lack of confidence in private banks, the money multiplier is reduced to 1.9. How much does the monetary base need to increase (in percentage terms) in order to keep the money supply constant?n
Pls help with the below multiple-type question, Select the correct option and explain it. Why are notice deposits not included in the M1 definition of money? a.Because the real value of notice deposits is zero. b.Because the value of notice deposits is much less stable than that of demand deposits and currency. c.Because they do not have direct or immediate access to goods and services. d.Because they are not recognized in law as legal tender. e.Because in terms of volume they are much less than demand deposits
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