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Pretend you are in charge of conducting monetary policy at the New York Fed and you have the following initial conditions. Initial Conditions rr/D = .10 C = 900 b%3D
D= 1800 b ER = 0 M= C+D Given the above information (show all work on your exam sheet): i) Calculate the MB. ii) Calculate the money multiplier (mm). iii) What is the money supply (use MS = mm x MB)?
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