Calculate a country money supply

Assignment Help Macroeconomics

Reference no: EM1370649

Assume the entire economy contains $5000 worth of one-dollar bills.
(a) If people fail to deposit any of the dollars, but instead hold all $5000 as currency, how large is the money supply?
(b) If people deposit the entire $5000 worth of bills in banks that are required to observe a 100% reserve requirement, how large is the money supply?
(c) If people deposit the entire $5000 worth of bills in banks that are required to observe a 20% reserve requirement, how large is the money supply?
(d) In part (c), what portion of the money supply was created due to banks?
(e) If people deposit the entire $5000 worth of bills in banks that are required to observe a 10% reserve requirement, how large could the money supply become?

Reference no: EM1370649

Questions Cloud

Design stored procedure to accept optional parameters : Design a stored procedure named spBalanceRange that accepts three optional parameters. Procedure returns a result set consisting of VendorName, InvoiceNumber and Balance for each invoice with a balance due

Question about online bill payment : The Wall Street Journal reported that businesses are aggressively pushing customers to pay their bills electronically. Numerous banks dropped their monthly fee for online bill paying,

Advantages of herfindahl index over concentration ratios : What are the advantages of the Herfindahl index over concentration ratios in measuring degrees of concentration in an industry? (b) What is the disadvantage of both?

Write program using array to show fifo queue : Write program using any language which uses the array to demonstrate simple FIFO queue with 10 job entering the queue and 5 jobs removed from the queue by the server.

Calculate a country money supply : Assume the entire economy contains $5000 worth of one-dollar bills. If people fail to deposit any of the dollars, but instead hold all $5000 as currency, how large is the money supply?

Java program use breadth-first search closest broadcast : Write the java program which will use breadth-first search (which you implement as part of your program) to determine the closest broadcast vertex for each vertex in graph.

Description of monopolistic competition : A restaurant industry has a market structure that comes closest to

Differences between monopolistic competition-pure monopoly : If the economy is at point C, what is the cost of one more automobile? One more rocket? Explain how the production possibilities curve reflects the law of increasing opportunities costs

Calculate atm fees : A bank in a mediumsized Midwestern city, Company X, currently charges$1 per transaction at it's ATM's. To determine whether to increase price,

User Account

All Pages