Assume that the monetary base (B) is $100 billion, the reserve-deposit ratio (rr) is 0.1, and the currency-deposit ratio (cr) is 0.1.

a. What is the money supply?
b. If $r r$ changes to $0.2$, but $c r$ is $0.1$ and $B$ is unchanged, what is the money supply?
c. If $r r$ is $0.1$ and cris $0.2$, but $B$ is unchanged, what is the money supply?

Question

Assume that the monetary base (B) is $100 billion, the reserve-deposit ratio (rr) is 0.1, and the currency-deposit ratio (cr) is 0.1.

a. What is the money supply?
b. If $r r$ changes to $0.2$, but $c r$ is $0.1$ and $B$ is unchanged, what is the money supply?
c. If $r r$ is $0.1$ and cris $0.2$, but $B$ is unchanged, what is the money supply?

Quizplus · Accepted Answer

The Answer of Assume that the monetary base (B) is $100 billion, the reserve-deposit ratio (rr) is 0.1, and the currency-deposit ratio (cr) is 0.1.

a. What is the money supply?
b. If $r r$ changes to $0.2$, but $c r$ is $0.1$ and $B$ is unchanged, what is the money supply?
c. If $r r$ is $0.1$ and cris $0.2$, but $B$ is unchanged, what is the money supply?

Assume That the Monetary Base (B) Is $100 Billion, the Reserve-Deposit