Function of high- powered money h

Assignment Help Macroeconomics
Reference no: EM131270432

The total money supply M has two components: bank deposits D and cash holdings C, which we assume to bear a constant ration CD=c, 0<c<1. The high-powered money H is defined as the sum of cash holdings held by the public and the reserves held by the banks. Bank reserves are fraction of bank deposits,determined by the reserve ratio r, 0<r<1.

a) Express the money supply M as a function of high- powered money H.

b) Would an increase in the reserve ratio or lower the money supply?

c) How would an increase in the cash-deposit ratio c affect the money supply?

Reference no: EM131270432

Questions Cloud

What is the return of investment : Assume you are working as a systems analyst in Company XYZ, and is conducting (along with your team-mates) a cost-benefit analysis for a customer who has hired your organization to design/develop a new information system. What is the total Net Presen..
How to add and use a menu control on the form : How to add and use a menu control on the form. Develop a "Grade Report" project, which allows user to create a sequential file or open an existing file, then save test scores in this file.
Required to demonstrate ethical judgment : Under Title 5 of the United States (U.S.) Code 2301, employees should be protected against reprisal for the lawful disclosure of information. Why wasn’t Snowden protected? Managers are required to demonstrate ethical judgment when facing complex issu..
Normative and positive statement : What is the difference between a normative and positive statement? Can you provide examples as well?
Function of high- powered money h : a) Express the money supply M as a function of high- powered money H. b) Would an increase in the reserve ratio or lower the money supply? c) How would an increase in the cash-deposit ratio c affect the money supply?
Where have you found good ideas for new venture : The text suggests a variety of places that entrepreneurs and business leaders find their ideas for a new enterprise. What do you do to “fire up your idea machine”? Where have you found good ideas for a new venture?
Find the total revenues taken in over the 2 year period : Revenues from sweater sales in a sportswear chain are given- Find the total revenues taken in over the 2-year period. - Find the total revenues taken in from t = 0 to t =9.
Draw the symbol boolean equation and truth table : Draw the symbol, Boolean equation, and truth table for a three-input OR gate
Major company experiencing legal versus ethical dilemma : Discuss what you believe to be legal versus what is ethical. Identify and explain one example of a major company experiencing the legal versus ethical dilemma. In your opinion, was it handled correctly?

Reviews

Write a Review

Macroeconomics Questions & Answers

  Calculate the labor force participation

The table below reports some labor market figures for a hypothetical country, Blefuscu in 2005. Assume that there are only two types of employment: full time and part time. Everyone who is not employed is unemployed. Calculate the Labor force part..

  Subsiquent policies would decrease demand-pull inflation

Among which of the subsiquent policies would decrease demand-pull inflation.

  What is the newest instrument of monetary policy

43 If the money supply rises , what must happen to GNP under the equation of exchange  44 What is the most important form of money in the U.S.  45 What is the most important instrument of monetary policy 46 Define federal funds rate

  How much cyclical unemployment cab reduce inflation

Suppose that the economy is initially at a long-run equilibrium. Then the Fed increases the money supply. Assuming any resulting inflation is unexpected, explain any changes in GDP, unemployment, and inflation that are caused by the monetary expan..

  Create matrix identifying the roles expenditures and revenue

Create a matrix identifying the roles, expenditures, and revenue for the federal, state, and local levels of government.

  What is the minimu value of cost

A decision maker wishe to minimize the cost of producing a given level of total benefit, B = 288. The cost function is C = 6x + 3y and the total benefit is B = xy. Set up the Lagrangian adn then determine the levels of x and y at the minimum level of..

  Lucidate what will happen to the economy in the short run

If the government decides to intervene to return the economy to full employment, elucidate what will happen to the economy in the short run and in the long run.

  Other banks think that if a bank needs to use the discount

Banks are reluctant to borrow from the Fed’s discount window because it’s looked down on by other banks. Other banks think that if a bank needs to use the discount window, it’s probably not very healthy. Explain why.

  Monopoly manufacture and monopoly retailer merge

Suppose a monopoly manufacturer sells directly to a monopoly retailer. What are the implications in regard to price, output, and profits as compared to the case where the monopoly manufacture and monopoly retailer merge? Explain why

  Classical and keynesian versions of macroeconomic model

Discuss the differences between the classical and Keynesian versions of macroeconomic model - Calculate the equilibrium exchange rate, level of income and net exports.

  Present day which are the result of government policies

Is it possible that the levels of unemployment present day which are the result of government policies.

  Probability of a fire resulting in a loss

Suppose that an individual has $100,000 in housing wealth (w). The probability of a fire resulting in a loss (L) of $60,000 is 10 percent. Suppose that this individual's utility function is U(w) = w0.5. Calculate and graph the following values:  ex..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd