Abbix has a complex financial system with the following

Reference no: EM13600068

ABBIX has a complex financial system with the following relationships: The ratio of required reserves to total deposits is 15 percents, and the ratio of noncheckable deposits to checkable deposits is 40 percent. In addition , currency held by the nonbank public amounts to 20 percent of checkable deposits. The ratio of government deposits to checkable deposits is 8 percent. Initial excess reserves are $900 million.

A. Determine the M1 multiplier and the maximum dollar amount of checkable deposits.

B. Determine the size of the M1 money supply

Reference no: EM13600068

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