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Airida [17]
3 years ago
9

What would be the amount of deposits D, given that the monetary base MB $750 billion, the required reserve rate (r) -0.1, the ex

cess reserve rate (ERID) 0.005, and non-bank currency to deposits (CID) equaled 1.2?
Business
1 answer:
Thepotemich [5.8K]3 years ago
4 0

Answer:

$574.71 billion.

Explanation:

The formula for calculating amount of deposits is as follows:

D= \frac{1}{(C/D)+rr+(ER/D)}\times MB

where,

D = Deposits

rr = required reserve rate

ER/D = excess reserve rate

C/D = non-bank currency to deposits

D= \frac{1}{(1.2)+0.1+(0.005)}\times 750

D = 574.712644

D = 574.71

Therefore,  the amount of deposits is $574.71 billion.

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