If the amount of high-powered money were 100 and the bank reserve holding ratio was 0.25 then the maximum stock of money would be (assume that citizens prefer to keep 10% of their money)
A) 100/0.25 which is 400.
B) (100 )(1.35 ) which is 540 0.25.
C) (100 )(1.1 ) which is approximately 314 0.35.
D) (100 )(1.35 ) which is approximately 386 0.35.
C
Economics
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A) money demand. B) nominal interest rates. C) real GDP. D) the inflation rate.
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