Find the new m2 money multiplier

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Reference no: EM13202511

On January 1 2011:
C/D = 0.2
T/D = 1.8
ER/D = 0.3
MB = USD. 12000000
Required reserve ratio on checkable deposits = 0.10
Required reserve ratio on time deposits = 0.07
These ratios have been defined in class and are assumed constant.

Find: the M2 money multiplier

On June 1 2011 Fed increases the monetary base by USD 1000000

Find: the new M2 money multiplier

On March 1 2012 Fed reduces the required reserve ratio on checkable deposits by 5%.

Find: the new M2 money multiplier

Reference no: EM13202511

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