How does the reserve ratio change if the Fed increases the required reserve ratio? How does...

How does the reserve ratio change if the Fed increases the required reserve ratio?

How does the currency-deposit ratio change if people decide to keep more of their money in cash rather than depositing it?

If people decide to hold zero currency (cu→0, meaning the currency-deposit ratio goes to zero), what is the relationship between the money supply and the monetary base (what is the money multiplier)?

If people decide to hold all of their money as currency and never make deposits (cu→∞, meaning the currency-deposit ratio goes to infinity), what is the relationship between the money supply and the monetary base (what is the money multiplier)?

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Expert Solution

Rahul Sunny answered 1 year ago

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