Engineering homework help
Engineering homework help. Assume the banking system contains the following amounts: Total reserves $80billion Transactions deposits $800billion Cash held by public $100billion Reserve requirement .10a)are the banks utilizing their full lending capacity?b) what would happen to the money supply initially if the public deposited another $30billion of cash in transactions accounts?c) What would the lending capacity be after such a portfolio switch?d)How large would the money supply be if the banks fully utilized their lending capacity?e) what three steps can the fed take to offset the potential growth in M1?Sidenote: I have completed the other problems for the homework assignment with some ease. However, with this problem, my mind draws a blank. Please help!
