answer question d&e with explanation.tq Q11. The economy of Elmendyn contains 2,000 RM1 bills.a) If people hold all money as currency, what is the quantity of money?b) If people hold all money as current account deposits and banks maintain 100 percentreserves, what is the quantity of money?c) If people hold equal amounts of currency and current account deposits and banksmaintain 100 percent reserves, what is the quantity of money?d) If people hold all money as current account deposits and banks maintain a reserveratio of 10 percent, what is the quantity of money?e) If people hold equal amounts of currency and current account deposits and banksmaintain a reserve ratio of 10 percent, what is the quantity of money?

Reserve ratio is the percentage of deposits that the banks are required to keep as reserves and are…

d) If people hold all money as current account deposits and banks maintain a reserve ratio of 10 percent, what is the quantity of money? e) If people hold equal amounts of currency and current account deposits and banks maintain a reserve ratio of 10 percent, what is the quantity of money?

d) If people hold all money as current account deposits and banks maintain a reserve ratio of 10 percent, what is the quantity of money? e) If people hold equal amounts of currency and current account deposits and banks maintain a reserve ratio of 10 percent, what is the quantity of money?

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter21: The Monetary System

Section: Chapter Questions

Problem 12PA

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Question

answer question d&e with explanation.tq

Q11. The economy of Elmendyn contains 2,000 RM1 bills.
a) If people hold all money as currency, what is the quantity of money?
b) If people hold all money as current account deposits and banks maintain 100 percent
reserves, what is the quantity of money?
c) If people hold equal amounts of currency and current account deposits and banks
maintain 100 percent reserves, what is the quantity of money?
d) If people hold all money as current account deposits and banks maintain a reserve
ratio of 10 percent, what is the quantity of money?
e) If people hold equal amounts of currency and current account deposits and banks
maintain a reserve ratio of 10 percent, what is the quantity of money?

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