Answer to Question #59687 in Macroeconomics for sara
: Suppose Mr. Master deposits AED 400,000 into a one-year Certificate of Deposit at 5%
interest. The Central Bank sets the reserve ratio for the banks at 20%.
a) Illustrate how the banks create money with the help of given information.
(Show first 6 steps)
b) Calculate the total money creation in the economy with the help of formula