Assume REQ Is 0 $\frac{\mathrm{ER}}{\mathrm{TDD}}$ , Equals 0 $\frac{\mathrm{C}}{\mathrm{TDD}}$ = 033 with These Assumptions, What Is the Money Multiplier

question 34

Essay

Assume REQ is 0.15 and the behavior of banks and depositors responds to interest rates such that banks do not make all the loans they can but rather want to hold 1% of their deposits (TDD) in excess reserves (ER), with the result that the ratio, $\frac{\mathrm{ER}}{\mathrm{TDD}}$

, equals 0.01. Also assume that the interest rate is at the level where the public will hold only 75% in checkable deposits (rather than a 100% maximum) and thus 25% in cash or currency (C) such that the ratio $\frac{\mathrm{C}}{\mathrm{TDD}}$
= 0.33. With these assumptions, what is the money multiplier?

---

Definitions:

Idle Time

Periods when resources, such as machinery or employees, are available but not in use due to a lack of work or inefficient scheduling.

Kanbans

Signaling systems used in just-in-time (JIT) production processes to regulate the flow of materials between different stages of production.

Andons

Visual feedback systems used in manufacturing to alert about any status changes in production, such as issues or slowdowns.

Visual Workplace

A work environment where information about processes and standards is communicated through visual means to improve understanding and efficiency.