Model of the money supply under fractional-reserve banking

Reference no: EM13698939

To increase tax revenue, the US government in 1932 imposed a two-cent tax on checks written on deposits in bank accounts (In today’s dollars, this tax was about 25 cents per checks)

1. Use the model of the money supply under fractional-reserve banking to discuss how this tac affected the money supply.

2.Many economists believe that a falling money supply was is part responsible for the severity of the Great Depression of the 1930s.From this perspective, was the check tax a good policy to implement in the middle of the Great Depression?

Reference no: EM13698939

Questions Cloud

What are the ex-post real interest rates : Assume that the inflation rates in 2010, 2011, and 2012 were 1%, 2%, and 3% respectively. During the same periods, nominal interest rates were 5%, 5%, and 6%, respectively. What are the ex-post real interest rates in 2010, 2011, and 2012?

Profit-sharing royalty scheme with the stall holders : Crepe Creations is considering franchising its unique brand of crepes to stall-holders on Hermoza Beach, which is five miles long. CC estimates that on an average day there are 1,000 sunbathers evenly spread along the beach and that each sunbather wi..

What first cost should be assigned to the existing system : A material handling system was purchased 3 years ago for $120,537. Two years ago it required substantial upgrading at a cost of $14,340. It once again is requiring an upgrading cost of $24,925. Alternately, a new system can be purchased today at a co..

Why is the unrestricted entry of new firms to all markets : Why is the unrestricted entry of new firms to all markets necessary to assure the efficient allocation of resources in the long run?

Model of the money supply under fractional-reserve banking : To increase tax revenue, the US government in 1932 imposed a two-cent tax on checks written on deposits in bank accounts (In today’s dollars, this tax was about 25 cents per checks)

Decreasing return-to-scale technology : Using graph, illustrate the effect of an increase of the input price on the production and profit of a one input-one output firm with decreasing return-to-scale technology?

Current revolution a communications revolution : In what way (or ways) is the current Knowledge Revolution a child of the Industrial Revolution? Is this a new revolution or simply an extension of the 18th-century revolution? Given the history, is it perhaps more appropriate to call the current revo..

Why do soft technologies open more opportunities for women : Why do the soft technologies open more opportunities for women? To what extent have these technologies impacted the perceptions of men’s and women’s roles in the economy, within marriage, and in society as a whole?

Primary characteristic of reframing innovation strategy : What is the primary characteristic of the reframing innovation strategy? Why is the reframing strategy difficult to execute within established organizations?

User Account

All Pages