Estimate the quantity of money, Financial Accounting

The economy of Cotai contains 2000 $1 bills.

(a) If people hold all money as currency, what is the quantity of money?

(b) If people hold all money as demand deposits and banks maintain 100 percent reserves, what is the quantity of money?

(c) If people hold equal amounts of currency and demand deposits and banks maintain 100 percent reserves, what is the quantity of money?

(d) If people hold all money as demand deposits and banks maintain a reserve ratio of 10 percent, what is the quantity of money?

(e) If people hold equal amounts of currency and demand deposits and banks maintain a reserve ratio of 10 percent, what is the quantity of money?

 

Posted Date: 3/26/2013 2:53:17 AM | Location : United States







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