Calculate currency-to-deposit ratio and money multiplier

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Reference no: EM13832621

Calculate the currency-to-deposit ratio (cr), and the money multiplier (m) given the following values:

rr = .20

C = $320

D= 1000

a. Calculate the currency-to-deposit ratio (cr), and the money multiplier (m) given the above values

b. Calculate total required reserves (RR), total actual reserves (AR) and the monetary base (MB).

c. Now assume the FED lowers the required reserve ratio to 0.10. Calculate the new money multiplier (mm’) and the new money supply (M1).

d. Calculate the new level of deposits (D’) and currency in circulation (C).

e. Calculate the new level of required reserves (RR’) and excess reserves (ER’).

Reference no: EM13832621

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