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(Solved) (Latest ver. Aug 2020) - How large is the money supply (M1)? How large are the required reserves? How large are excess reserves? By how much could the banks increase their lending activity?

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Assume that the following data describe the condition of the banking system:

Total Reserves:$200 billion
Transactions Deposits:$800 billion
Cash held by the public:$100 billion
Reserve Requirement:0.20

a)How large is the money supply (M1)?
b)How large are the required reserves?
c)How large are excess reserves?
d)By how much could the banks increase their lending activity?

 







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This question was answered on: Sep 16, 2020

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