The desired reserve ratio is 10 percent of deposits, and the currency drain ratio is 2 percent of deposits. The central bank makes an open market purchase of $4 million of securities. Calculate the change in the quantity of money. How much of the new money is currency and how much is bank deposits? >>> Answer to 2 decimal places. The quantity of money changes by $ 34.0 million. of the new money created, $ million is bank deposits.
The desired reserve ratio is 10 percent of deposits, and the currency drain ratio is 2 percent of deposits. The central bank makes an open market purchase of $4 million of securities. Calculate the change in the quantity of money. How much of the new money is currency and how much is bank deposits? >>> Answer to 2 decimal places. The quantity of money changes by $ 34.0 million. of the new money created, $ million is bank deposits.
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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