Macroeconomics 11th Edition by Michael Parkin

تمرين 7

In Problem, the banks have no excess reserves. Suppose that the Bank of Nocoin, the central bank, increases bank reserves by $0.5 billion.
a. What happens to the quantity of money?
b. Explain why the change in the quantity of money is not equal to the change in the monetary base.
c. Calculate the money multiplier.
Problem
Use the following information to work Problem.
In the economy of Nocoin, banks have deposits of $300 billion. Their reserves are $15 billion, two thirds of which is in deposits with the central bank. Households and firms hold $30 billion in bank notes. There are no coins!
Calculate the monetary base and the quantity of money.