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During summer of 2006, China increased their reserve requirement for the banking system while maintaining a fixed target for the interbank lending interest rate. Draw a graph of the market for reserves when a central bank increases the reserve ratio while maintaining a fixed interest rate. What effect would such a policy have on the monetary base? If there is no excess reserve, what effect would such a policy have on the money multiplier? Can we say what would be the effect on the money supply? (Assume that the target interest rate is below the discount rate and the central bank in China does not pay interest on reserves.)
1. To qualify as official development assistance (ODA), development loans must have a grant element of at least 25 percent, calculated using a stated annual interest rate of 10 per
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According to the Solow model, how would each of the following affect consumption per worker in the long run (i.e. in the steady state)? Draw a figure and explain. a. The destruc
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