Answered: Discuss THREE (3) main determinants of…

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Economics

Discuss THREE (3) main determinants of money supply in Malaysia

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter27: Money And Banking

Section: Chapter Questions

Problem 8RQ: How does the existence of money simplify the process of buying and selling?

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Concept explainers

Required Reserve and Excess Reserve Analysis

A required reserve is an amount of cash that banks must keep with themselves, which is certain percentage of the deposits made by their customers. Required reserve is a percentage of the bank's deposits that the respective bank must have on each overnight. The percentage rate is set and determined by the nation’s central bank. It is important to have such funds accumulated to meet its uncertain obligations, sudden liabilities and withdrawals. Required reserve is also known as reserve ratio. Reserve ratio is an important tool to control the money supply.

Question

Q3 B)

(b) Discuss THREE (3) main determinants of money supply in Malaysia

Answer should be written with proper examples and elabotations.

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Determinants of Money Supply in Malaysia

M1 Money Supply

M2 Money Supply

M3 Money Supply

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