Suppose checking deposits increase by $6,000 after all rounds of the money-creation process when the Fed buys $1,200 worth of U.S. government securities. This implies that the maximum value of the required reserve ratio is:
a. 5

b. 0.75.
c. 0.2.
d. 1.2.
e. 1.0.


c

Economics

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In what way does this map serve as an abstraction?

Zoom out to the highest level. How does this affect the level of abstraction? When would each type of map be most useful? Generalize this argument by discussing the level of abstraction needed for alternative economic models.

Economics