Suppose we have an economy with the amounts "money in circulation = ,000" "money in checkable deposits = 00"
Let’s assume the balance sheet of Bank A is as follows
Assets: Reserve = 00. Loans = 00
Liabilities: Checkable Deposit = 00 Net Worth = 00
Let’s assume that consumers wanted to withdraw 0 from their Checkable Deposits so they keep this money in forms of cash in circulation.
What is M1(money supply) when we look at the effect of this action. What is the amount of cash in circulation and the amount of checkable deposits?
I’m not sure how to setup my multiplier method model and what is the rrr?
yeah I go to sbu
too lazy to go to the library now, but do you know what to do? In my notes it tells me the ratio, but I’m not sure what to do here. In the examples, it’s loans + reserves = CD but in this question its telling me the loans are 00 when the CD is 00 which leaves me confused