4. Suppose in a certain year the central bank engaged in a roundof quantitative easing, which resulted in an increase in thevolume of reserves by £400 mln. The CB printed £70 mln incurrency, and of it £50 mln ended up being held by householdsand firms. In addition, commercial banks extended £600 mln innew loans to the public. By how much did broad money increasein the economy?

Given information: Increase in reserve = 400 mlnPrinted amount = 70 mlnLoan by banks = 600 mln

Answered: Suppose in a certain year the central…

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter24: The Influence Of Monetary And Fiscal Policy On Aggregate Demand

Section: Chapter Questions

Problem 1CQQ

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