Holdings of excess reserves
Problem:
Question 1: If the country went into a recession, would you expect banks to increase or decrease their holdings of excess reserves? Explain. Please show all work.
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If the country went into a recession, would you expect banks to increase or decrease their holdings of excess reserves? Explain. Please show all work.
Additionally, a common practice in India is for companies like P&G India to work with a currency agent who will, in this case, lock in the current spot exchange rate and interest rate data, recommend a hedging strategy. Please justify your ans
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