ps9 - ECON 205: PRINCIPLES OF MACROECONOMICS FALL 2007 MARK...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
ECON 205: PRINCIPLES OF MACROECONOMICS FALL 2007 MARK MOORE PROBLEM SET 9 1. Baumol and Blinder, ch. 13 (p. 275 in 2007 Update), Test Yourself, question 1. 2. Baumol and Blinder, ch. 13 (p. 275 in 2007 Update), Test Yourself, question 3. 3. Baumol and Blinder, ch. 13 (p. 275 in 2007 Update), Test Yourself, question 4. 4. Baumol and Blinder, ch. 13 (p. 275 in 2007 Updte), Test Yourself, question 7. 5. Baumol and Blinder, ch. 13 (p. 276 in 2007 Update), Discussion Question 4. 6. Baumol and Blinder, ch. 13 (p. 276 in 2007 Update), Discussion Question 6. 7. Explain how changes in the money supply affect output. 8. Explain the most important reason why the AD curve slopes down. ECON 205: PRINCIPLES OF MACROECONOMICS FALL 2007 MARK MOORE PROBLEM SET 9: SOLUTIONS 1. Required reserves=$60 billion. Total deposits = $60 billion/(required reserve ratio). The money supply = deposits plus currency outside banks = deposits plus $60 billion. Therefore: (i) required reserve ratio = 10 % implies money supply=$60 bn/.1 + $60 bn =$660 bn. (ii) required reserve ratio = 12.5% implies
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 03/02/2008 for the course ECON 205 taught by Professor Kamrany during the Fall '07 term at USC.

Page1 / 3

ps9 - ECON 205: PRINCIPLES OF MACROECONOMICS FALL 2007 MARK...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online