If the required reserve ratio is 10 percent, currency in circulation is $1,200 billion, checkable deposits are $1,600 billion, and excess reserves total $2,500 billion, Then the money supply is [HINT: As a decimal 0.12345 or percent 12.345%]
Answer:-
M= M money supply
MB = monetary base
C = currency in circulation
D = checkable deposits
R = actual reserves
ER = excess reserves
q = required reserve ratio
Money multiplier "= \\frac{M}{MB}=\\frac{C+D}{R+C}=\\frac{C+D}{q\u00d7D+ER+C} \\\\\n=\\frac{1200+1600}{0.1\u00d71600+2500+1200}=0.73" answer
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