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Spielberg takes $100 out of his piggy bank and deposits it in his Hollywood

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Question;Spielberg takes $100 out of his piggy bank and deposits it in his Hollywood Bank checking account. By how much does the total amount of deposits in the banking system increase;(i) if this $100 stays in the banking system as reserves, and;(ii) if banks hold reserves equal to 10 percent of deposits?;By how much does the money supply increase in each case? Note that money supply consists of currency and demand deposits.;3. Use AD-AS diagrams to explain the short-run and long-run effects of each of the following events on output and the price level. Assume that policymakers take no action.;a) A severe earthquake damages factories along the west coast;b) Stock market crash

 

Paper#57909 | Written in 18-Jul-2015

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