Refer to table below. Suppose that the Fed had decided to set the U.S. money supply in December 1932 and in December 1933 at the same value as in December 1930. a. Assuming that the values of currency held by the public and the reserve-deposit ratio had remained as given in the table, what should the values of bank reserves be to reach the stated target for the U.S. money supply? Instruction: enter all responses rounded to two decimal places Money Supply Currency held by public Reserve-deposit ratio Actual Bank reserves Needed Bank reserves December 1930 $44.1 billion $3.85 billion 0.075 $3.31 billion $3.31 billion December 1932 $44.1 billion $4.82 billion 0.109 $3.18 billion billion December 1933 $44.1 billion $4.85 billion 0.133 $3.45 billion billion b. In order to accomplish this objective, the Fed would have had to conduct open market purchases to increase bank reserves by $ _______ billion in 1932 and $_________ billion in 1934.
Refer to table below. Suppose that the Fed had decided to set the U.S. money supply in December 1932 and in December 1933 at the same value as in December 1930. a. Assuming that the values of currency held by the public and the reserve-deposit ratio had remained as given in the table, what should the values of bank reserves be to reach the stated target for the U.S. money supply? Instruction: enter all responses rounded to two decimal places Money Supply Currency held by public Reserve-deposit ratio Actual Bank reserves Needed Bank reserves December 1930 $44.1 billion $3.85 billion 0.075 $3.31 billion $3.31 billion December 1932 $44.1 billion $4.82 billion 0.109 $3.18 billion billion December 1933 $44.1 billion $4.85 billion 0.133 $3.45 billion billion b. In order to accomplish this objective, the Fed would have had to conduct open market purchases to increase bank reserves by $ _______ billion in 1932 and $_________ billion in 1934.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Refer to table below. Suppose that the Fed had decided to set the U.S. money supply in December 1932 and in December 1933 at the same value as in December 1930.
a. Assuming that the values of currency held by the public and the reserve-deposit ratio had remained as given in the table, what should the values of bank reserves be to reach the stated target for the U.S. money supply?
Instruction: enter all responses rounded to two decimal places
Money Supply | Currency held by public | Reserve-deposit ratio | Actual Bank reserves | Needed Bank reserves | |
December 1930 | $44.1 billion | $3.85 billion | 0.075 | $3.31 billion | $3.31 billion |
December 1932 | $44.1 billion | $4.82 billion | 0.109 | $3.18 billion | billion |
December 1933 | $44.1 billion | $4.85 billion | 0.133 | $3.45 billion | billion |
b. In order to accomplish this objective, the Fed would have had to conduct open market purchases to increase bank reserves by $ _______ billion in 1932 and $_________ billion in 1934.
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