To get a feel for what the money mu

To get a feel for what the money multiplier means, let us construct a numerical examwith realistic numbers for the following variables:
r = required reserve ratio = 0.10
C = currency in circulation = $400 billion
D = checkable deposits = $800 billion
ER = excess reserves = $0.8 billion
M = money supply (Ml) = C + D = $1,200 billion
From these numbers we can calculate the values for the currency ratio c and the excess
reserves ratio e:
_ $400 billion _
$800 billion
$0.8 billion
e = = 0.001
$800 billion
The resulting value of the money multiplier is
1+0.5 _ 1.5 _ m ~ 0.1 + 0.001 + 0.5 ~ 0.601 ~
The money multiplier of 2.5 tells us that, given the required reserve ratio of 10% on checkable deposits and the behavior of depositors as represented by c = 0.5 and banks as represented by e = 0.001, a $1 increase in the monetary base leads to a $2.50 increase in the money supply (Ml).
An important characteristic of the money multiplier is that it is less than the simdeposit multiplier of 10 found earlier in the chapter. The key to understanding this result is to realize that although there is multiple expansion of deposits, there is no such expansion for currency. Thus, if some portion of the increase in high- powered money finds its way into currency, this portion does not undergo multiple deposit expansion. In our simple model earlier in the chapter, we did not allow for this possibility, and so the increase in reserves led to the maximum amount of muldeposit creation. However, in our current model of the money multiplier, the level of currency does increase when the monetary base MB and checkable deposits D increase because c is greater than zero. As previously stated, any increase in MB that goes into an increase in currency is not multiplied, so only part of the increase in MB is available to support checkable deposits that undergo multiple expansion. The overall level of multiple deposit expansion must be lower, meaning that the increase in M, given an increase in MB, is smaller than the simple model earlier in the chapter indicated.

Kết quả (Việt) 1:

Để có được một cảm giác cho những gì số nhân tiền có nghĩa là, hãy cho chúng tôi xây dựng một số examwith con số thực tế cho các yếu tố sau:r = tỷ lệ dự trữ bắt buộc = 0,10C = loại tiền tệ trong lưu thông = $400 tỷD = thể tiền gửi = $800 tỷER = dự trữ dư thừa = 0.8 tỷ USDM = cung tiền (Ml) = C + D = $1.200 tỷ đồngTừ những con số này, chúng tôi có thể tính toán các giá trị cho thu tỷ lệ c và sự vượt trộidự trữ tỷ lệ e:_ $400 tỷ _800 tỷ USD0,8 tỷ USDe == 0,001800 tỷ USDGiá trị kết quả của các tiền nhân1 + 0,5 _ 1.5 _ m ~ 0.1 + 0,001 + 0,5 ~ 0.601 ~Số nhân tiền 2,5 cho chúng ta biết rằng, được đưa ra tỷ lệ dự trữ bắt buộc của 10% trên tiền gửi thể và hành vi của người gửi tiền khi đại diện bởi c = 0,5 và ngân hàng như đại diện bởi e = 0,001, một $ 1 tăng tiền tệ cơ sở dẫn tới sự gia tăng $2,50 trong việc cung cấp tiền (Ml).An important characteristic of the money multiplier is that it is less than the simdeposit multiplier of 10 found earlier in the chapter. The key to understanding this result is to realize that although there is multiple expansion of deposits, there is no such expansion for currency. Thus, if some portion of the increase in high- powered money finds its way into currency, this portion does not undergo multiple deposit expansion. In our simple model earlier in the chapter, we did not allow for this possibility, and so the increase in reserves led to the maximum amount of muldeposit creation. However, in our current model of the money multiplier, the level of currency does increase when the monetary base MB and checkable deposits D increase because c is greater than zero. As previously stated, any increase in MB that goes into an increase in currency is not multiplied, so only part of the increase in MB is available to support checkable deposits that undergo multiple expansion. The overall level of multiple deposit expansion must be lower, meaning that the increase in M, given an increase in MB, is smaller than the simple model earlier in the chapter indicated.