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Question 11 The economy of Elmendyn contains 2.000 RM1 bills. (Please display the relevant calcul ations to support your answer.) a) If people hdd all money as currency, what is the quantity of money? b) If people hold all money as current account deposits and banks maintain 100 percent reserves, what is the quantity of money? c) If people hold equal amounts of currency and current account deposits and banks maintain 100 percent reserves, what is the quantity of money? d) If people hold all money as current account deposits and banks maintain a reserve ratio of 10 percent, what is the quantity of money? e) If people hold equal amounts of currency and current account deposits and banks maintain a reserve ratio of 10 percent, what is the quantity of money?

Question 11 The economy of Elmendyn contains 2.000 RM1 bills. (Please display the relevant calcul ations to support your answer.) a) If people hdd all money as currency, what is the quantity of money? b) If people hold all money as current account deposits and banks maintain 100 percent reserves, what is the quantity of money? c) If people hold equal amounts of currency and current account deposits and banks maintain 100 percent reserves, what is the quantity of money? d) If people hold all money as current account deposits and banks maintain a reserve ratio of 10 percent, what is the quantity of money? e) If people hold equal amounts of currency and current account deposits and banks maintain a reserve ratio of 10 percent, what is the quantity of money?

Essentials of Economics (MindTap Course List)
Essentials of Economics (MindTap Course List)
8th Edition
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter21: The Monetary System
Section: Chapter Questions
Problem 12PA
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Chapter 9: The Monetary System Question 1 Which of the following are momey in the Malaysi an economy? Which are not? Explain your answers by discussing each of the three functions of money. a) a Malaysian Ringgit b) a Mexican peso c) a Picasso painting d) a plastic credit card Question 6 You take RM100 you had kept under your pillow and deposit it in your bank account. If this RM100 stays in the banking system as reserves and if banks hold reserves equal to 10 percent of deposits, by how much does the total amount of deposits in the banking system increase? By how much does the money supply increase? Question 11 The economy of Elmendyn contains 2.000 RM1 bills. (Please display the relevant calculations to support your answer.) a) If people hodd all money as currency, what is the quantity of money? b) If people hold all money as current account deposits and banks maintain 100 percent reserves, what is the quantity of money? c) If people hold equal amounts of currency and current account deposits and banks maintain 100 percent reserves, what is the quantity of money? d) If people hold all money as current account deposits and banks maintain a reserve ratio of 10 percent, what is the quantity of money? e) If people hold equal amounts of currency and current account deposits and banks maintain a reserve ratio of 10 percent, what is the quantity of money?
Transcribed Image Text:Chapter 9: The Monetary System Question 1 Which of the following are momey in the Malaysi an economy? Which are not? Explain your answers by discussing each of the three functions of money. a) a Malaysian Ringgit b) a Mexican peso c) a Picasso painting d) a plastic credit card Question 6 You take RM100 you had kept under your pillow and deposit it in your bank account. If this RM100 stays in the banking system as reserves and if banks hold reserves equal to 10 percent of deposits, by how much does the total amount of deposits in the banking system increase? By how much does the money supply increase? Question 11 The economy of Elmendyn contains 2.000 RM1 bills. (Please display the relevant calculations to support your answer.) a) If people hodd all money as currency, what is the quantity of money? b) If people hold all money as current account deposits and banks maintain 100 percent reserves, what is the quantity of money? c) If people hold equal amounts of currency and current account deposits and banks maintain 100 percent reserves, what is the quantity of money? d) If people hold all money as current account deposits and banks maintain a reserve ratio of 10 percent, what is the quantity of money? e) If people hold equal amounts of currency and current account deposits and banks maintain a reserve ratio of 10 percent, what is the quantity of money?
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