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28 Sep 2019
The economy of Elmendyn contains 2,000 $1 bills.
a) If people hold all money as currency, what is the money supply?
b) If people hold all money as demand deposits and banks maintain 100 percent reserves, what is the quantity of money?
c) If people hold equal amounts of currency and demand deposits and banks maintain 100 percent reserves, what is the quantity of money?
d) If people hold all money as demand deposits and banks maintain a reserve ratio of 10 percent, what is the quantity of money? If the reserve ratio is 20 percent, what then is the money supply?
e) If people hold equal amounts of currency and demand deposits and banks maintain a reserve ratio of 10 percent, what is the quantity of money?
The economy of Elmendyn contains 2,000 $1 bills.
a) If people hold all money as currency, what is the money supply?
b) If people hold all money as demand deposits and banks maintain 100 percent reserves, what is the quantity of money?
c) If people hold equal amounts of currency and demand deposits and banks maintain 100 percent reserves, what is the quantity of money?
d) If people hold all money as demand deposits and banks maintain a reserve ratio of 10 percent, what is the quantity of money? If the reserve ratio is 20 percent, what then is the money supply?
e) If people hold equal amounts of currency and demand deposits and banks maintain a reserve ratio of 10 percent, what is the quantity of money?
Chika IlonahLv10
28 Sep 2019
