The desired reserve ratio is 2 percent of deposits, and the currency drain ratio is 4 percent of deposits. The central bank makes an open market purchase of $2 million of securities. Calculate the change in the quantity of money. How much of the new money is currency and how much is bank deposits? >>> Answer to 2 decimal places. The quantity of money changes by $ million.
The desired reserve ratio is 2 percent of deposits, and the currency drain ratio is 4 percent of deposits. The central bank makes an open market purchase of $2 million of securities. Calculate the change in the quantity of money. How much of the new money is currency and how much is bank deposits? >>> Answer to 2 decimal places. The quantity of money changes by $ million.
Chapter25: Money, Banking, And The Federal Reserve System
Section: Chapter Questions
Problem 14P
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