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Assume that the following data describe the condition of the banking system. Use this information to answer five questions. Total reserves Transactions deposits $250 billion $900 billion Cash held by public Reserve requirement $500 billion 0.10 Check my work mode: This shows what is correct a. How large is the money supply (M1)? $ 900 billion b. How large are required reserves? $ 60 billion c. How large are excess reserves? $ 40 billion d. What is the money multiplier? 10 e. How much is the unused lending capacity? $ 240 billion

Assume that the following data describe the condition of the banking system. Use this information to answer five questions. Total reserves Transactions deposits $250 billion $900 billion Cash held by public Reserve requirement $500 billion 0.10 Check my work mode: This shows what is correct a. How large is the money supply (M1)? $ 900 billion b. How large are required reserves? $ 60 billion c. How large are excess reserves? $ 40 billion d. What is the money multiplier? 10 e. How much is the unused lending capacity? $ 240 billion

Brief Principles of Macroeconomics (MindTap Course List)
Brief Principles of Macroeconomics (MindTap Course List)
8th Edition
ISBN:9781337091985
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter11: The Monetary System
Section: Chapter Questions
Problem 5PA
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Assume that the following data describe the condition of the banking system. Use this information to answer five questions. Total reserves Transactions deposits $250 billion $900 billion Cash held by public Reserve requirement $500 billion 0.10 Check my work mode: This shows what is correct a. How large is the money supply (M1)? $ 900 billion b. How large are required reserves? $ 60 billion c. How large are excess reserves? $ 40 billion d. What is the money multiplier? 10 e. How much is the unused lending capacity? 240 billion $
Transcribed Image Text:Assume that the following data describe the condition of the banking system. Use this information to answer five questions. Total reserves Transactions deposits $250 billion $900 billion Cash held by public Reserve requirement $500 billion 0.10 Check my work mode: This shows what is correct a. How large is the money supply (M1)? $ 900 billion b. How large are required reserves? $ 60 billion c. How large are excess reserves? $ 40 billion d. What is the money multiplier? 10 e. How much is the unused lending capacity? 240 billion $
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