Advanced monetary theory, Microeconomics

Consider a hypothetical ABC economy in which the narrowly-defined measure of the  money supply (M1), as defined in the Canadian sense, in existence is 1250$ million. Assuming the economy's banking system behavior may be characterized by the following simple broad money-multiplier model in which all the variables are as defined in class:

MB= C+RR+ER (equilibrium condition)

C=0.25D (currency holdings of the non-bank public)


RRd=0.05D (required reserves against demand deposits)

RRt=0.02T (required reserves against term deposits)

T=0.8D (definition of term deposits)


ERd=0.002D (ratio of excess reserves to demand deposits)

ERt=0.001T (ratio of excess reserves to term deposits)

Posted Date: 3/14/2013 5:34:21 AM | Location : United States

Related Discussions:- Advanced monetary theory, Assignment Help, Ask Question on Advanced monetary theory, Get Answer, Expert's Help, Advanced monetary theory Discussions

Write discussion on Advanced monetary theory
Your posts are moderated
Related Questions
#question.theories of cost

THEORY OF CONSUMER SURPLUS: We discuss the basic concept of consumer surplus and its derivation. A consumer normally pays less for a commodity than the maximum amount that she

hoe does the knowledge of price elasticity of demand important to the government

Marginal revenue: Marginal revenue is the change in total revenue with respect to a change in quantity sold. That is, it is the change in total revenue that results from the s

national income and what is used to measure it

Three factors that determine demand for coffee and tea

negative slope on ppf represents what?

Who are the competitors in the jarred baby food market? What market share do they have? How do Heinz and Beech-Nut compete with one another? Are the barriers to entry high or low f