Draw a graph of the market for reserves, Microeconomics

During summer of 2006, China increased their reserve requirement for the banking system while maintaining a fixed target for the interbank lending interest rate. Draw a graph of the market for reserves when a central bank increases the reserve ratio while maintaining a fixed interest rate. What effect would such a policy have on the monetary base? If there is no excess reserve, what effect would such a policy have on the money multiplier? Can we say what would be the effect on the money supply? (Assume that the target interest rate is below the discount rate and the central bank in China does not pay interest on reserves.)

Posted Date: 3/20/2013 1:58:33 AM | Location : United States







Related Discussions:- Draw a graph of the market for reserves, Assignment Help, Ask Question on Draw a graph of the market for reserves, Get Answer, Expert's Help, Draw a graph of the market for reserves Discussions

Write discussion on Draw a graph of the market for reserves
Your posts are moderated
Related Questions
Explain about the determination of equilibria. Determination of Equilibria: The fourth step for studying an economic step is to make trade-off choices and find out the be

what is the buying power of one''s income?

Problem 1: i) ‘There is a trade-off between inflation and unemployment.' Do you agree with this statement? Justify your example using appropriate diagrams. ii) Mauritius is


demand elasticity in urdu

Normal 0 false false false EN-IN X-NONE X-NONE MicrosoftInternetExplorer4

brief explain of keynesian consumption theory

Question 1: i) Elaborate on how CPI is used to calculate inflation and what are the limitations of such a measure? ii) Growth is always beneficial. Discuss iii) Explain

Q. What do you meant by Retained Earnings? Retained Earnings: Business profits that aren't distributed to shareholders (by dividends or other pay-outs) thoughinstead are retain

assignment of demand thorey