Wednesday

April 16, 2014

April 16, 2014

Posted by **jill** on Friday, May 24, 2013 at 11:15am.

If the required reserve ratio is 0.2, by how much could the money supply expand if the central bank purchased £2 billion worth of bonds?

2.0 billion x 0.20 = 400 million to be held in reserve, which means that the money supply increases by, 1.6 billion.

- economics -
**MAJ**, Tuesday, December 31, 2013 at 8:21amThe money multiplier is 1/required reserve ratio. So .2=1/5. The money multiplier is 1/(1/5)=5.

So money will expand by 2B X 5 = 10 Billion

**Related Questions**

economics...please help! - if a demand curve given is q=5/p.. and no variables ...

algebra - x^2+22x+72= (x*4)(x*18)... just checking if this is right?

algebra1 - im just checking to make sure i did my problems right before tomorrow...

please help me calc. have test tom - d/dx integral from o to x of function cos(2...

maths - I've to solve the following absolute value equation 8|w-7|=72. I solved ...

checking to see if this is right - just checking to see if i have this problem ...

college algebra - Just che king to see if I did this right. f(x)=(x-4)^2+6 Graph...

General - Please understand that I am not upset with anyone or whatever I just ...

Math - Can you tell me if I got these wrong or right? 1. Ms. Jordan has been ...

Algebra 2 - Just checking to see if I got this right. Thanks, (3x^4--8x^2 -3x-3...