Use the information below to answer the following questions: C=currency = 1000, Deposits=D = 800, 11. = 0.1, e-excess reserve ratio = 0.25. What is the value of excess reserves, ER? a. b. What is the value of the monetary base, MB? C. What is the value of the money multiplier, m? d. What is the value of the money supply, M? If the required reserve ratio increases to rx= 0.15, what will be the new value of the money multiplier? e. 5.

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
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5.
Use the information below to answer the following questions:
C=currency = 1000, Deposits-D = 800, 11. = 0.1, e-excess reserve ratio = 0.25.
What is the value of excess reserves, ER?
a.
b.
What is the value of the monetary base, MB?
c.
What is the value of the money multiplier, m?
d.
What is the value of the money supply, M?
If the required reserve ratio increases to rr=0.15, what will be the new value of the
money multiplier?
Transcribed Image Text:5. Use the information below to answer the following questions: C=currency = 1000, Deposits-D = 800, 11. = 0.1, e-excess reserve ratio = 0.25. What is the value of excess reserves, ER? a. b. What is the value of the monetary base, MB? c. What is the value of the money multiplier, m? d. What is the value of the money supply, M? If the required reserve ratio increases to rr=0.15, what will be the new value of the money multiplier?
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