Total reserves $55 billion Transactions deposits: $600 billion Cash held by public: $400 billion Bonds held by public: $400 billion Stocks held by public: $140 billion Gross domestic product: $8 trillion Interest rate: 6 percent Required reserve ratio: 0.10 How large is the money supply (M1)? How much excess reserves are there? What is the money multiplier? What is the available lending capacity

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 7PA
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Total reserves

$55 billion

Transactions deposits:

$600 billion

Cash held by public:

$400 billion

Bonds held by public:

$400 billion

Stocks held by public:

$140 billion

Gross domestic product:

$8 trillion

Interest rate:

6 percent

Required reserve ratio:

0.10

  • How large is the money supply (M1)?
  • How much excess reserves are there?
  • What is the money multiplier?
  • What is the available lending capacity?
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