Before the rate cut and after the rate cut

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Reference no: EM131104323

According to the “World View” below, World View: China Cuts Reserve Requirements With its vast economy showing signs of slower growth, China has opted to encourage more bank lending. China’s central bank, the People’s Bank of China, said it is trimming the required reserve ratio for its banks by half a percentage point—to 19.5 percent, down from 20 percent. The lower reserve requirement enables banks to lend more of their reserves. The move is expected to free up about $16 billion in bank reserves. Source: News reports, June 8-10, 2014.

What was the money multiplier in China:

(a) Before the rate cut? Instructions: Enter your response rounded to the nearest whole number.

Money multiplier:

(b) After the rate cut? Instructions: Enter your response rounded to two decimal places.

Reference no: EM131104323

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