Assume That the Monetary Base (B) Is $100 Billion, the Reserve-Deposit

question 70

Essay

Assume that the monetary base (B) is $100 billion, the reserve-deposit ratio (rr) is 0.1, and the currency-deposit ratio
(cr) is 0.1.
a. What is the money supply?
b. If rr changes to 0.2, but cr is 0.1 and B is unchanged, what is the money supply?
c. If rr is 0.1 and cr is 0.2, but B is unchanged, what is the money supply?

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Definitions:

Identification

The process through which an individual aligns themselves with specific groups, values, or characteristics.

Superego

The superego is a component of Sigmund Freud's psychoanalytic theory, acting as the ethical component of the personality by providing moral standards by which the ego operates.

Oedipus Complex

A psychoanalytic theory introduced by Freud suggesting a child's unconscious sexual desire for the opposite-sex parent and jealousy towards the same-sex parent.

Free Association

A psychoanalytic technique in which the patient verbalizes thoughts as they come to mind without censorship or selection, intended to uncover unconscious desires and conflicts.