What would be the amount of deposits D, given that the monetary base MB = $750 billion, the required reserve rate (rD) = 0.1, the excess reserve rate (ER/D) = 0.005, and non-bank currency to deposits (C/D) equaled 1.2?
What will be an ideal response?
We can solve for D using the following equation: D = 
xMB, substituting in the values given, we obtain $574.7 billion.
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