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
1) The $787 billion stimulus package, "American Recovery and Reinvestment Act" passed in Winter 2009 contained a mix of tax rebates, tax credits and increases in various transfer p

Model in economics is the permanent income hypothesis, which basically states that a household''s expenditures will not react to a change in income unless that change in income is

Assume that you have a client that is a paper manufacturer and they have expressed concern that the government will pass a new regulation banning the use of chlorine based technolo

Relatiƶn between TC ,TFC and TVC

1. Suppose that Mr. John has the following Cobb-Douglas utility function U = 6X^2/3y^1/3 the market price of X and Y commodity are $1 and $2, respe

Contribution of bonds in n economy.

If the MU of the 1st unit consumed = 75 utils, and the TU of consuming 2 units is 130 utils, what is the marginal utility of the second unit?



What is framework in the Modern Economics? Framework in the Modern Economics: The framework is a framework which uses to deal along with daily activities and is utilized to