Exercises
Money and Banking
Money and Banking
Initially, a banking system has a reserve of $400, of which $160 are excess reserves. Also, there are $1200 deposits and the public holds $200 cash. Suppose $100 is withdrawn from the banking system and held as cash by the public. What will the money supply be if the banks lend out all excess reserves?
Skills required: remember important formula and apply it to the complex question
“Cryptocurrency is a good money.” Evaluate this statement.
Skills required: understand the background information and analyze the real-world situation combined with economic concepts
Digital renminbi is a central bank digital currency issued by China’s central bank. From money and banking’s perspective, what are the advantages of using digital currency over physical banknotes?
Skills required: understand the background information and analyze the real-world situation combined with economic concepts