Calculate impact of increase in desired currency holdings

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Calculate the impact of an increase in desired currency holdings (currency drain) on the money supply from 10% to 15% when the reserve ratio is 10 percent of deposits, and central bank’s balance sheet is presented below in billion dollars: ASSETS LIABILITIES Gold = $200 Currency in circulation = $300 Foreign exchange = $150 Deposits of chartered banks = $300 Government Bonds = $150 Deposits of Federal government = $100 Currency in the vault = $200

Reference no: EM131094608

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