AB 204 Unit 7 Assignment Money, Banks and the Federal Reserve System Updated
1. This section deals with increase money supply given two scenarios (see “a” and “b” below).
In Westlandia, the public holds 50% of money one (M1) in the form of currency, and the required reserve ratio is 20%.
2. Explain how each of the following changes quantity of money (money supply) in the economy.
3. Assume that in a country the total holdings of banks were as follows:
