How does the money multiplier differ when currency holdings are zero, compared to when currency holdings are greater then zero?

If the currency -to-deposit ratio increases, what effect, if any, does this have on the monetary base, the money supply, total depsoits, and economic growth?

I saw the new Pixar movie Wall-E this past weekend, and it was a visual marvel. I've long since stopped really noticing that these animated movies are animated, because the techniques and tools have progressed so far. (Did you even notice the appearance of actual live non-computer-generated footage?)

From a straight movie perspective, it was ok -- certainly not my favorite Pixar movie. But what it lacked in strong actor presence it made up for with educational value. Here are the top seven things I learned about life from watching Wall-E.

** Warning: Potential Spoiler Alert **

1. Capitalism is bad --  The movie takes place some 700 years after an exodus of humanity from a trashed and poisoned Earth. Presumably, this is the result of the "benign" rule of the BnL corporation. So, the big bad corporation is the cause of the downfall of Earth. (I'm guessing that between the technological requirement of Wall-E and the political requirement of a corporation taking over a united Earth, I'm pegging the exodus at a hundred years or so from now.)
2. Apple is good -- Talk about product placement, way to go Steve Jobs! From the still functioning 800 year old iPod to the Macintosh startup sound when Wall-E reboots, it's nice to see that the rumors of Apple's imminent demise have been (greatly) exagerated.
3. People are sheep -- We let the corporation take over the world, we let (helped?) them trash and poison it, and then we let them talk us into running away from the problem. Then, given the "Shangri-La" environment of the Axiom, we devolved into overweight, glowing screen addicted blobs. (Oh wait, that last part isn't really evolution, now that I think about it...)
4. People are adaptable -- After a seeming lifetime of relative ignorance, the Captain stays up into the night querying the ship's computer (Sigourney Weaver in her finest ship performance since Futurama) about Earth. John and Mary instinctively seize on their new-found freedom once made aware of the "real world" by Wall-E, and sacrificed their own safety to protect a sliding mass of children on the Ledo deck. Seemingly nobody on-ship objects to returning to Earth and starting anew. Yes, people seem to have an inherent attraction to what's fundamentally right and a curiousity about what's around them.
5. Computers are evil -- The autopilot deviously tried squashing concrete fact in order to maintain its hold on power. (Where have I heard that before?) The repair bots tried to "fix" EVA in a move reminiscent of Nicholson in "One Flew Over the Cookoo's Nest". Hell, EVA tried blowing Wall-E away on several occasions. They just can't be trusted. (Except, of course, for the computer I'm typing this on... heh heh...)
   
6. Robots are good -- EVA and Wall-E were just doing their jobs, but realized that there was a new directive worth striving for. The "broken" bots also pitched in to help them achieve that goal, as did the writhing mass of humanity. Ultimately, the bots tried to do what's best for us.
7. Stuff lasts forever -- Come on, a Rubix Cube, iPod, and Atari 2600 that are still in one piece 800 or more years later? I have a cube that didn't last 5 years in my closet, and who knows where my 2600 is. Still, the idea that our trash is still around hundreds of years later rings true. After all, I've been to New Jersey.

Some of these may seem contradictory, but that's the nature of the future. And of cartoons. So deal with it.

Another semester has come to a close, and with it some (hopefully) better grades.

So what are you doing this summer? If you're like most students, you might benefit from this post I wrote a couple of years ago about how to spend your summer vacation. 

For me, there's no rest for the wicked... We've enjoyed a doubling of usage in each of the past three semesters, and I aim to keep that trend going for the fall. I'm sitting in the local Starbucks right now, enjoying a too-large coffee and thinking of more cool and useful things to do with College-Cram.

Enjoy your summer!

Between wrapping up the spring semester and starting my summer "vacation" plans, I changed my profile page to include links to some of the most popular articles I've written over the years.

In case you hadn't seen them all, here they are:

• Best Ways to Cheat in College
• Seven Keys to Getting Better Grades
• How to Write a Killer Essay
• How to Take Good Notes
• How to Work with Word Problems
- - - - - - - - - - - -
• Seven Keys to Writing a Better Resume
• Seven Keys to Ace Your Next Job Interview
• Secret Behind Textbook Costs
• Finding a Holiday Job
• Giving an Oral Presentation
• How I Spent My Summer Vacation

Enjoy these, there are plenty more where they came from.
 

I'm doing this assignment and I'm totally lost,

U.S. :

d= 200 -40p

s= 40 +40p

Rest of the world:

d= 160 -40p

s= 80 +40p

The U.S. govenment imposes a quota of 32 units on its imports. Calculate the magnitude of deadweight loss resulting from the quota under the assumption that the U.S. is a small open economy?

If anyone knows about this it would great if you could help me out!

Every day, bunches of economics students searching for homework help because they're having trouble with economics end up at College-Cram.com. Sometimes the textbook is confusing and other times they just need some extra help, but either way we have a bunch of resources to help students get the economics homework help they need:

Try our resources and you'll find getting better grades in less time isn't that hard!

No, this isn't about Star Wars. We had some pretty serious thunderstorm activity pass through here early this morning with torrential rains, lightning strikes, tornados, and sporadic wind damage scattered throughout the area. While College-Cram is hosted by a major hosting company, unfortunately that company is located about 30 minutes north of us and was also caught in the same storm front.

The results, as some of you may have noticed, were some intermittent outages all day today.(I believe we were down about an hour total, in about four separate incidents.)

I applaud those of you who braved the elements and stuck with us, including Dzenana looking for Macroeconomics homework help on market equilibrium, and those who even managed to keep a sense of humor.  You're the real storm troopers.

I'm still not sure how the whole "college-cram" thing works, but if it might give me some help with the Macro project, I figured it's worth a try.

Here is the problem:

Eastland's currency is called the eastmark, and Westland's currency is called westmark. The supply of and demand for eastmark are given as:

Demand=25,000-5000e+50,000(Re-Rw)

Supply=18,500+8,000e-50,000(Re-Rw) where nominal exchange rate e is measured as westmarks per eastmarks, and Re and Rw are the real inerest rates prevailing in Eastland and Westland.

If Re=Rw=0.10 or 10%, what is market equilibrium value of the eastmark?

Any help, pointer, or anything that you can offer will be greatly appreciated.

Let c_b = 0.2. Let the real money demand in the economy equal L^D = 10 + 2Y – 8r.  The price level P is fixed at P = 1. Y is the level of output and r is the rate of interest.  What is the LM curve for this economy?

anyone help?

Dear Professor Cram,

Could you please answer the following question for me?

Suppose that the public holds a cash/deposit ration of  c_p = 0.2, and the commercial banking sector holds a reserve/deposit ration of c_b = 0.2.  The monetary base is given by H = 50.

Find the value of the money multiplier and the total amount of money in the economy. How does the money multiplier change if the central bank raises the reserve requirement to c_b = 0.3? Briefly explain the economic reasoning for this change in the money multiplier.

____________

 

The Multiplier (M) for money is (1+C_p)/(C_p + C_b).

When C_p=0 the formula reduces to its simpler form of the inverse of reserves, or 1/ C_b.

For your question, we start with

C_p = 0.2 and  C_b = 0.2 so the multiplier is (1+0.2)/(0.2+0.2) = 1.2/0.4 = 3

The total money in the economy is M·H = 3·50 = 150

When the banking reserve requirement is increased to 0.3 the multiplier drops:

(1+0.2)/(0.2+0.3) = 1.2/0.5 = 2.4

This will reduce the total amount of money in the economy.

I hope this helps.

Good studying.