Question
In: Economics
The currency drain ratio is 0.2 and the desired reserve ratio is 0.5. What is the...
The currency drain ratio is 0.2 and the desired reserve ratio is 0.5.
What is the money multiplier?
The money multiplier is __.
Solutions
Expert Solution
Ans) The money multiplier is 1.71
Money multiplier = =(1+CDR)/(DRR + CDR)
= ( 1 + 0.2) / ( 0.5 + 0.2)
= 1.2/ 0.7 = 1.71
Rahul Sunny answered 2 years agoRelated Solutions
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Part 9
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ratio is 0.2 and the currency to deposit ratio is 0.09, then:
a) Calculate the total demand for high powered money.
b) Calculate the money multiplier.
(1 mark each for sub-parts a and b (no word count
requirement applies) - Part 9 worth 2 marks)
Additional Requirements
1. Honesty pledge that you have completed the Course Experience
Survey (CES).
Note: We value your feedback and want to...
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