Again, please use the following data for an economy that has only two banks, Bank A and Bank B. Partial balance sheet information is given for each bank below: Bank A: Reserves on hand $65,000 Deposit in the Fed $40,000 US government bonds $10,000 Checking account balances $120,000 Savings account balances $30,000 Bank B: Cash in the bank $20,000 US government bonds $8000 Deposit in the Fed $50,000 Savings account balances $25,000 Checking account balances $100,000 In addition, people in this economy hold $4400 in cash, and all banks have the same reserve requirements we've used all semester. Calculate this economy's M1 money supply, using the simplified definition, carefully following all numeric instructions.
Again, please use the following data for an economy that has only two banks, Bank A and Bank B. Partial balance sheet information is given for each bank below: Bank A: Reserves on hand $65,000 Deposit in the Fed $40,000 US government bonds $10,000 Checking account balances $120,000 Savings account balances $30,000 Bank B: Cash in the bank $20,000 US government bonds $8000 Deposit in the Fed $50,000 Savings account balances $25,000 Checking account balances $100,000 In addition, people in this economy hold $4400 in cash, and all banks have the same reserve requirements we've used all semester. Calculate this economy's M1 money supply, using the simplified definition, carefully following all numeric instructions.
Chapter19: Money Creation
Section: Chapter Questions
Problem 8SQP
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