Business
Business, 21.12.2020 17:50, jose477

When the real interest rate increases, banks have an incentive to lend a greater portion of their deposits, which reduces the reserveā€“deposit ratio. In particular, suppose that res = 0.4 āˆ’ 2r, where res is the reserve-deposit ratio and r is the real interest rate. The currency-deposit ratio is 0.4, the price level is fixed at 1.0, and the monetary base is 60. The real quantity of money demanded is

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