1a. The public's preference is to hold their money as half cash, half demand deposit. Reserve...

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1a. The public's preference is to hold their money as half cash, half demand deposit. Reserve requirement is 25%. Determine monetary multiplier.b. They now decide to split off half the cash into savings accounts. How much M2 is generated from a $100 increase in monetary base?

David · Accepted Answer

1 a) The public's preference is to hold their money as half cash, half demand deposit. Reserve 
requirement is 25%. Determine monetary multiplier. 
Answer: 
Given that public's preference is to hold their money as half cash, half demand deposit, this 
means currency drain [i.e.

1a. The public's preference is to hold their money as half cash, half demand deposit. Reserve requirement is 25%. Determine monetary multiplier. b. They now decide to split off half the cash into...

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