Lod 3 page 444 a head the deposit expansion

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Economics: A Contemporary Introduction
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Chapter 28 / Exercise 8
Economics: A Contemporary Introduction
McEachern
Expert Verified
LOD: 3 Page: 444 A-Head: The Deposit Expansion Multiplier.111.Why would it be correct to say that, if we assume that people do not change their currency holdings and that banks do not hold any excess reserves, the equation RRrD=1really could be stated asRRrM=11?
LOD: 3 Page: 444 A-Head: The Deposit Expansion Multiplier.Cecchetti: Money, Banking, and Financial Markets531
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Economics: A Contemporary Introduction
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Chapter 28 / Exercise 8
Economics: A Contemporary Introduction
McEachern
Expert Verified
Chapter 17 The Central Bank Balance Sheet and the Money Supply Process112.What would be the change in deposits resulting from a $10 million open market purchase by the Fed if we assume the required reserve rate is ten percent (0.1) and that banks will hold excess reserves in the amount of two percent (0.02) of deposits?
LOD: 3 Page: 448 A-Head: The Monetary Base and the Money Supply.113.Total banking system reserves equal $58.65 billion. The total banking system checkable deposits subject to reserve requirements are $510 billion. The required reserves are $51 billion. What is the required reserve rate, and what isthe excess reserve rate?
D
= R
LOD: 3 Page: 448 A-Head: The Monetary Base and the Money Supply.114.What would be the amount of deposits D, given that the monetary base MB = $750 billion, the required reserve rate (rD) = 0.1, the excess reserve rate (rE) = 0.005, and non-bank currency to deposits (C/D) equaled 1.2?
xMBrrDCDED++=/1
LOD: 3 Page: 448 A-Head: The Monetary Base and the Money Supply.532Cecchetti: Money, Banking, and Financial Markets
Chapter 17 The Central Bank Balance Sheet and the Money Supply Process115.What was the main reason the Fed stopped announcing growth targets for money aggregates in the early 2000s?

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