Money, Banking and the central Banking system - determining the money supply - Reserves, Bank deposits, and the money multiplier
5 important questions on Money, Banking and the central Banking system - determining the money supply - Reserves, Bank deposits, and the money multiplier
What reduces the size of the multiplier.
IT IS STILL IN CURRENCY
What is the monetary system in which funds are always deposited in bank accounts? How is the money supply determined in this monetary system?
- the bank keeps the reserve ratio
- the bank lends out all the excess reserves
- this money that is loaned will end up in another bank account
- this starts the money multiplier
What do we call the reserves that are over and above ht amount needed to satisfy the desired ratio?
- Higher grades + faster learning
- Never study anything twice
- 100% sure, 100% understanding
What is rr the symbol for?
1000+(1000*(1-rr)) +(1000*(1-rr)^2)+(1000*(1-rr)^3)+(1000*(1-rr)^n)
What will happen when the excess reserves increases? What is the value of the chequable deposit only?
- This will increase the total value of chequable deposits
- the total value of the chequable deposits will be equal to the value of bank reserves divided by the reserve ratio
The question on the page originate from the summary of the following study material:
- A unique study and practice tool
- Never study anything twice again
- Get the grades you hope for
- 100% sure, 100% understanding