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ex 1 Assume the currency-deposit ratio is 20%, banks are required to hold 8% of their deposits in reserves, and they hold an additional 2% in excess reserves. If the stock of high- powered money is H = $300 billion, the stock of money is. ex 2 If M1 is $1,080 billion, total bank deposits are $800 billion and the reserve-deposit ratio is 10%. by how much would the Fed have to change bank reserves to lower money supply by 2%?

ex 1 Assume the currency-deposit ratio is 20%, banks are required to hold 8% of their deposits in reserves, and they hold an additional 2% in excess reserves. If the stock of high- powered money is H = $300 billion, the stock of money is. ex 2 If M1 is $1,080 billion, total bank deposits are $800 billion and the reserve-deposit ratio is 10%. by how much would the Fed have to change bank reserves to lower money supply by 2%?

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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ex 1 Assume the currency-deposit ratio is 20%, banks are required to hold 8% of their deposits in reserves, and they hold an additional 2% in excess reserves. If the stock of high- powered money is H = $300 billion, the stock of money is. ex 2 If M1 is $1,080 billion, total bank deposits are $800 billion and the reserve-deposit ratio is 10%. by how much would the Fed have to change bank reserves to lower money supply by 2%?
Transcribed Image Text:ex 1 Assume the currency-deposit ratio is 20%, banks are required to hold 8% of their deposits in reserves, and they hold an additional 2% in excess reserves. If the stock of high- powered money is H = $300 billion, the stock of money is. ex 2 If M1 is $1,080 billion, total bank deposits are $800 billion and the reserve-deposit ratio is 10%. by how much would the Fed have to change bank reserves to lower money supply by 2%?
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