Foundations of Economics (8th Edition)
8th Edition
ISBN: 9780134486819
Author: Robin Bade, Michael Parkin
Publisher: PEARSON
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Chapter 27, Problem 2MCQ
To determine
To explain:
The option that correctly identifies what is included in the money of the United States.
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A 1
Consider the following monetary data:
2000
2008
Monetary base ($bn)
8.5
8.7
Reserve deposit ratio (%)
20
15
Currency deposit ratio (%) 13. 23
a. Calculate the change in the money supply between 2000-2008 if the currency deposit ratio changes as shown, but the reserve deposit ratio stays constant.
b. Calculate the change in the money supply between 2000-2008 if the reserve deposit ratio changes as shown, but the currency deposit ratio stays constant.
c. Which of the two changes is more responsible for the overall change in the money supply from 2000-2008? Why?
Time left 0:26:0
The economy recently experienced an increase in the number of tourist arrivals, increasing income throughout
the island.
Select one:
Oa.
money supply increase, money demand increase, interest rate decrease
b.
money supply unchanged, money demand decrease and interest rate decrease
C.
money supply increase, money demand unchanged, interest rate decrease
d. money supply unchanged, money demand increase, interest rate increase
money supply decrease, money demand unchanged, interest rate increase
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In the economy of Nocoin the banks have deposits of $300 billion. Their reserves are $36 billion, two thirds of which is in deposits with the central bank. Households and firms hold $24 billion in bank notes (dollar bills). There are no coins!
Calculate the monetary base and the quantity of money.
Calculate the banks' desired reserve ratio and the currency drain ratio (as percentages).
The monetary base is $ billion.
The quantity of money is $ billion.
The banks' desired reserve ratio is percent.
The currency drain ratio is
percent
Chapter 27 Solutions
Foundations of Economics (8th Edition)
Ch. 27 - Prob. 1SPPACh. 27 - Prob. 2SPPACh. 27 - Prob. 3SPPACh. 27 - Prob. 4SPPACh. 27 - Prob. 5SPPACh. 27 - Prob. 6SPPACh. 27 - Prob. 7SPPACh. 27 - Prob. 8SPPACh. 27 - Prob. 9SPPACh. 27 - Prob. 10SPPA
Ch. 27 - Prob. 11SPPACh. 27 - Prob. 12SPPACh. 27 - Prob. 13SPPACh. 27 - Prob. 1IAPACh. 27 - Prob. 2IAPACh. 27 - Prob. 3IAPACh. 27 - Prob. 4IAPACh. 27 - Prob. 5IAPACh. 27 - Prob. 6IAPACh. 27 - Prob. 7IAPACh. 27 - Prob. 8IAPACh. 27 - Prob. 9IAPACh. 27 - Prob. 10IAPACh. 27 - Prob. 11IAPACh. 27 - Prob. 1MCQCh. 27 - Prob. 2MCQCh. 27 - Prob. 3MCQCh. 27 - Prob. 4MCQCh. 27 - Prob. 5MCQCh. 27 - Prob. 6MCQCh. 27 - Prob. 7MCQCh. 27 - Prob. 8MCQ
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