Posted by **boneesha** on Friday, October 1, 2010 at 3:36pm.

1. A bank has $120 million in total assets, which are composed of reserves,

loans, and securities. Its only liabilities are $120 million in transactions

deposits. The banks exactly satisfies its reserve requirement, and its total

reserves equal $6 million. What is the required reserve ratio?

2. Suppose that the value of the potential money multiplier is equal to 4. What

is the required reserve ratio?

3. Suppose that the quantity of money in circulation is fixed but the income

velocity of money doules. If real GDP remains at its long-run potential

level, what happens to the equilibrium price level?

was just wondering if thers a formula for these prblems. how would i set up number 1??

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