drain coefficient

What is the expected short-run effect on the equilibrium levels of income, employment, and the domestic exchange rate?

1(a). First, explain the concept of the money multiplier. Then from the information that the narrow money supply (M1) in a hypothetical Canadian economy [with a competitive banking system in which banks produce only demand deposits] is $1750 million,and the idle excess reserves drain coefficient (e) is 3%, the desired cash reserve ratio (r) for […]

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