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Speed of circulation of the currency

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You made a check for $ 6000 to buy a state bond from your friend. If he deposits the check into his bank account, how much can the money supply vary in the case where the reserve ratio is set at 10%?

The Bank of Canada has bought a $ 12,000 state bond from your friend. If he deposits all of the $12,000 in his bank account, how much can the Central Bank's stock vary the money supply if the reserve ratio is set at 20%?

Using the quantitative theory of money, answer the following question: if the money supply increases by 6%, production increases by 2% and the speed of circulation of the currency is constant, then how much should increase the prices?

Reference no: EM132270357

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