The money base in an economy is 200bn. The public holds a quarter of it in cash, and the reserve ratio is 20%. If the public reduces the quantity of cash held by 10bn then the supply of liquid assets will increase by
The money base in an economy is 200bn. The public holds a quarter of it in cash, and the reserve ratio is 20%. If the public reduces the quantity of cash held by 10bn then the supply of liquid assets will increase by
Economics (MindTap Course List)
13th Edition
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Roger A. Arnold
Chapter13: The Federal Reserve System
Section: Chapter Questions
Problem 5WNG
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