What is on this picture is all I have Money Use the following table to answer qu

Question

What is on this picture is all I have

Money Use the following table to answer questions 70 to72 Reserves held by charted banks 8 Reserves held by charted banks-8 Loans 42 demanded for transaction purpose 50 Money demanded for precautionary purpose 40 Money demanded for Asset purpose-10-1000 ( Saving deposits 20 apital of charted banks Currency in circulation 10 Demand deposits 20 70. What is the equilibrium interest rate (i) ? a. 0.05 b. 0.02 c. 0.10 d. 0.5 e. 0.2 71. What is the value of the money multiplier? a. 4 b. 3 c. 2.5 d. 1 e. 5

Explanation / Answer

1) Solution: 0.05

Working:

10-1000*I = -40

50 =1000I

I=0.05

2) Solution: 5

Working: 1/MPS = 1/0.20 = 5

10-1000*I = -40

50 =1000I

I=0.05

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