redwizards
New member
- Joined
- Apr 23, 2007
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- 3
Hello. I was curious if anyone could assist me in completing my macroeconomics edification by assisting me in the logic of these problems. The queries are as follows;
Assume a required reserve ratio of .25. An increase in excess reserves of $700 million can potentially lead to a demand deposit expansion of _ ?
If the required reserve ratio is .1 and reserves initially decline by $600, demand deposits can decline by _ ?
if the required reserve ratio is .2 and reserves initially decline by $400, demand deposits can decline by _ ?
Someone digs $6,000 out of his mattress and opens a checking account. If the banking system is required to keep 25% reserve to deposit ratio, what is the ultimate increase in demand deposits consequent to his deposit?
I would appreciate any assistance.
Thanks
Assume a required reserve ratio of .25. An increase in excess reserves of $700 million can potentially lead to a demand deposit expansion of _ ?
If the required reserve ratio is .1 and reserves initially decline by $600, demand deposits can decline by _ ?
if the required reserve ratio is .2 and reserves initially decline by $400, demand deposits can decline by _ ?
Someone digs $6,000 out of his mattress and opens a checking account. If the banking system is required to keep 25% reserve to deposit ratio, what is the ultimate increase in demand deposits consequent to his deposit?
I would appreciate any assistance.
Thanks