1 assume the required reserve-deposit ratio, Macroeconomics

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1 assume the required reserve-deposit ratio

1. Assume the required reserve-deposit ratio is 12%, and the currency-deposit ratio is 38%. How much would money supply change if the Fed made open market purchases of $100 million?

2. If bank deposits in the banking system are $1,800 billion, the required reserve-deposit ratio is 15%, and currency outstanding is $200 billion, what can the Fed do to increase the money supply by $250 million?

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Macroeconomics: 1 assume the required reserve-deposit ratio

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