Suppose that Neha makes a new cash deposit of $120,000. If the assumptions of the multiplier-deposit expansion process hold, (with the required reserve ratio set at 20%), this deposit will _____ (increase or decrease)  the money supply by _________.

5. The reserve requirement, open market operations, and the money supply Assume that banks do not hold excess reserves and that households do not hold currency, so the only form of money is checkable deposits. To simplify the analysis, suppose the banking system has total reserves of $100. Determine the simple deposit multiplier and the money supply for each reserve requirement listed in the following table. Reserve Requirement (Percent) 15 10 Simple Deposit Multiplier A lower reserve requirement is associated with a Money Supply (Dollars) money supply. Suppose the Federal Reserve wants to increase the money supply by $100. Again, you can assume that banks do not hold excess reserves and that households do not hold currency. If the reserve requirement is 10%, the Fed will use open-market operations to worth of U.S. government bonds. Now, suppose that, rather than immediately lending out all excess reserves, banks begin holding some excess reserves due to uncertain economic conditions.…

b, c and d help needed

5. Critical analysis Q13 True or False: When you deposit currency in a checking account, cash goes out of circulation and the money supply declines. True False

Suppose that Maria makes a new cash deposit of $75,000. If the assumptions of the multiplier-deposit expansion process hold, (with the required reserve ratio set at 20%), this deposit will ________(INCREASE /DECREASE)   the money supply by $____________   . (Note: Currency held by the public is counted in the money supply as part of M1.)

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Question 4 Homework Unanswered If the reserve ratio is 12.5%, the deposit multiplier is: Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a 12.5. 10. 8. impossible to calculate from the information given. b d O

1. Why does the public want to hold some of its wealth as money? Answer the following: (a) What is the basic determinant of the transactions demand? The level of_ - The higher this level, the ( smaller, greater) the amount of money demanded for transactions. (b) the asset demand for money? The level of - The higher this level, the (smaller, greater ) the amount of money demanded as an asset.

18) The ________ the costs associated with deposit outflows are, the ________ excess reserves banks will want to hold. A) lower; more B) higher; less C) higher; more D) none of the above, since deposit outflows cannot be anticipated