Question

In: Economics

Suppose that the required reserve ratio is 8​%, currency in circulation is ​$600 billion, the amount...

Suppose that the required reserve ratio is 8​%, currency in circulation is ​$600 billion, the amount of checkable deposits is ​$900 ​billion, and excess reserves are ​$12 billion.

The money supply is ​$ billion?

Solutions

Expert Solution

The money supply is equal to = Currency in circulation + checkable deposits.

money supply = 600 + 900

money supply = $1500 billion.


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