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29/06/201
Date 5 Time: 1:00-2:40 PM Total Mark:
5
Students ID U00034998
Questions 1 2 3 Total
Point 1.5 1.5 2 5
Student Mark
1. Calculate the money supply for the following data? (0.5 mark)
Given:
2. Calculate the currency in circulation for the following data? (0.5 mark)
Given:
Assets Liabilities
Loans $ 6,000
the banks new balance sheet, assuming the bank obtains the cash by
drawing down its reserves. Does the bank now hold excess reserves? Is it
interest. The Central Bank sets the reserve ratio for the banks at 10%. (2 Marks)
a) Illustrate how the banks create money with the help of given information.
b) Calculate the total money creation in the economy with the help of formula.
(0.5 Marks)
Assets
Liabilities
RR 100000 100000
L 90000
RR 9000 90000
L 81000
RR 8100 81000
L 72900
RR 7290 72900
L 65610
RR 6561 65610
L 59049
RR 5904.9 59049
L 53144.1
B) 100000*1/10%=1000000