Business, 09.04.2021 01:40 yhbgvfcd6677
Assume there is an economy with a single bank, and the central bank sets the reserve requirement ratio at 5%. Assume also that the only bank had no transactions (i. e., no loans, reserves, or deposits) prior to an individual who deposits $2000 of currency with the bank.
a. As a result of this deposit, calculate the amount of required reserves, actual reserves, and excess reserves.
b. After the bank has issued the maximum amount of loans, what will be the total amount of loans, deposits, and money in the economy?
c. What is the size of the money multiplier for this economy?
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Assume there is an economy with a single bank, and the central bank sets the reserve requirement rat...
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