2020HW2 - Name Recitation day and time Principles of...

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Name:_____________________________________________ Recitation day and time:______________________________ Principles of Macroeconomics – 2020-200 Homework problem set 2 TA Hakon Skjenstad Deadline: Friday February 22 nd 16:00 at the ECON main office
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Principles of Macroeconomics Econ 2020-200 Homework problem set 2 1. Assume that in a closed economy GDP is $10 trillion, taxes are &1.6 trillion, consumption is $7 trillion and government purchases are $2 trillion. Calculate public and private savings, and national investment. 2. Assume the banking system has total reserves of $100 billion. Assume also that required reserves are 5% of checking deposits and that banks hold no excess reserves and households no currency. a. What is the money multiplier? b. What is the money supply? c. If the Fed raises required reserves to 20% of deposits, what is the change in reserves and the change in money supply?
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3. Use the graph below to answer the following questions. Assume that the Fed sells $10 billion in T-bills from banks. The required
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This note was uploaded on 09/30/2009 for the course BCOR 1010 taught by Professor Latier,jef during the Spring '07 term at Colorado.

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2020HW2 - Name Recitation day and time Principles of...

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