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b. C. What is the value of the monetary base? (Give $ value.) Suppose the interest rate on government bonds is 2.7%. What is the government' revenue? (Give a $ value; ignore the costs of printing the currency, etc., and assu bank does not pay interest on reserves.)

b. C. What is the value of the monetary base? (Give $ value.) Suppose the interest rate on government bonds is 2.7%. What is the government' revenue? (Give a $ value; ignore the costs of printing the currency, etc., and assu bank does not pay interest on reserves.)

Essentials of Economics (MindTap Course List)
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 12PA
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Suppose that a country computes its monetary aggregates in the same way as the Federal Reserve. The relevant table on the central bank website reports the following values. a. b. C. Currency Treasury securities Savings deposits Other checkable deposits Large time deposits Bank reserves Retail money market mutual funds Demand deposits Small time deposits $751 $1,041 $642 $241 $802 $167 $105 $524 $361 What is the value of M1? (Give $ value.) What is the value of the monetary base? (Give $ value.) Suppose the interest rate on government bonds is 2.7%. What is the government's seigniorage revenue? (Give a $ value; ignore the costs of printing the currency, etc., and assume the central bank does not pay interest on reserves.)
Transcribed Image Text:Suppose that a country computes its monetary aggregates in the same way as the Federal Reserve. The relevant table on the central bank website reports the following values. a. b. C. Currency Treasury securities Savings deposits Other checkable deposits Large time deposits Bank reserves Retail money market mutual funds Demand deposits Small time deposits $751 $1,041 $642 $241 $802 $167 $105 $524 $361 What is the value of M1? (Give $ value.) What is the value of the monetary base? (Give $ value.) Suppose the interest rate on government bonds is 2.7%. What is the government's seigniorage revenue? (Give a $ value; ignore the costs of printing the currency, etc., and assume the central bank does not pay interest on reserves.)
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