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Assume that the following data describe the condition of the banking system:
Total Reserves $200 billion
Transactions Deposited $700 billion
Cash held by public $100 billion
Reserve Requirement 0.20
(a) How large is the money supply (M1)?
(b) How large are required reserves?
(c) How large are excess reserves?
(d) By how much could the banks increase their lending activity?
what effect would a rise in the velocity of money have on output, employment and price level?
# ???? .. difference between gdp at market price and nnp at factor cost
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