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Economics

Compute the level of high- powered money given the Currency - deposit ratio of the public and the cash - reserve ratio of the banks

Suppose the ratio of deposits that banks hold in the form of reserves is 7 percent. Suppose further that people want to hold 8 percent of their deposits in the form of cash. Then, if the Fed wants the money supply to be $6,228 billion, illustrate what is the necessary level of high-powered money?

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Business Economics, Economics

Category:- Business Economics
Reference No.:- M920700

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