EBK THE ECONOMICS OF MONEY, BANKING AND
EBK THE ECONOMICS OF MONEY, BANKING AND
4th Edition
ISBN: 8220100668203
Author: Mishkin
Publisher: PEARSON
Question
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Chapter 17, Problem 1DAP
To determine

  1. The value of the currency deposit ratio c.
  2. The amount of excess reserves and the excess reserve ratio e
  3. The value of the money multiplier m, assuming a required reserve ratio rrof 11%

Concept introduction:

Currency deposit ratio: The ratio between currency and checkable deposits.

Excess reserve ratio: The ratio between excess reserve and checkable deposits.

Money multiplier formula:

  m=1+crr+e+c

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