Increase in the currency-to-deposit ratio

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Reference no: EM131896480

Compute the impact on the money multiplier of an increase in the currency-to-deposit ratio from 10 percent to 15 percent when the reserve requirement is 8 percent of deposits, and banks’ desired excess reserves are 3 percent of deposits.

Instructions: Please round your answers to the nearest hundredth (2 decimal places).

When desired currency holdings = 10% of deposits, m = ?

When desired currency holdings = 15% of deposits, m = ?

Reference no: EM131896480

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