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Problem: Suppose the supply of central bank money (Hs) is $4.0 trillion. In addition, assume the public prefers to hold 40 percent of its money holding in the form of currency (c = .4) and the ratio of reserves to deposits is 1.8 (.8). Calculate the values for the money supply and the money multiplier. Explain your answers and provides examples.

Macroeconomics, Economics

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