The change in the monetary base and the change in its components.

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Chapter 27, Problem 9SPPA

To determine

To calculate:

The change in the monetary base and the change in its components.

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The desired reserve ratio is 10 percent of deposits, and the currency drain ratio is 1 percent of deposits The central bank makes an open market purchase of $3 million of securities. Calculate the change in the quantity of money. How much of the new money is currency and how much is bank deposits? >>> Answer to 2 decimal places The quantity of money changes by $27.55 million. of the new money created, million is bank deposits

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