Macroeconomics intermediate

Sep 17th, 2015
Business Finance
Price: $5 USD

Question description

Economists occasionally speak of �helicopter money� as a short-hand approach to explaining
increases in the money supply. Suppose the Governor of the Fed flies over
the country in a helicopter dropping 10,000,000 in newly printed $100 bills (a total of $1
billion). By how much will the money supply increase if, holding everything else constant:

d. people in the economy hold half of their money as currency and half as deposits, while
banks choose to hold  10 percent of their deposits as reserves?

Tutor Answer

(Top Tutor) Ali A744
School: UIUC

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