Assume that the Habib Bank of Pakistan has total reserves of Rs. 50 Million. Assume also that required reserves are 15 percent of checking deposits and that bank hold no excess reserves and households hold no currency. Show a T-account for Habib Bank Calculate the money multiplier and Calculate the money supply If the State Bank of Pakistan now raises required reserves to 25 percent of deposits, What will be the effect on money multiplier? . What will be the effect on Reserves? What will be the effect on money Supply?
Assume that the Habib Bank of Pakistan has total reserves of Rs. 50 Million. Assume also that required reserves are 15 percent of checking deposits and that bank hold no excess reserves and households hold no currency. Show a T-account for Habib Bank Calculate the money multiplier and Calculate the money supply If the State Bank of Pakistan now raises required reserves to 25 percent of deposits, What will be the effect on money multiplier? . What will be the effect on Reserves? What will be the effect on money Supply?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Assume that the Habib Bank of Pakistan has total reserves of Rs. 50 Million. Assume also that required reserves are 15 percent of checking deposits and that bank hold no excess reserves and households hold no currency.
Show a T-account for Habib Bank
Calculate the money multiplier and Calculate the money supply
If the State Bank of Pakistan now raises required reserves to 25 percent of deposits,
What will be the effect on money multiplier? .
What will be the effect on Reserves?
What will be the effect on money Supply?
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