Suppose that r = required reserve ratio = 0.15 c={C/D} = currency ratio = 0.25 e={ER/D}= excess reserve ratio = 0.05 MB the monetary base = $3,000 billion Given that the formula for the money multiplier is 1+C r+e+c find the value for M, the money supply. The money supply is $ billion. (Round your response to the nearest whole number.) Use the money multiplier to find the new value for the money supply if open market operations increase the r by $300 billion. The money supply is now $ billion. (Round your response to the nearest whole number.)

Suppose that r = required reserve ratio = 0.15 c={C/D} = currency ratio = 0.25 e={ER/D}= excess reserve ratio = 0.05 MB the monetary base = $3,000 billion Given that the formula for the money multiplier is 1+C r+e+c find the value for M, the money supply. The money supply is $ billion. (Round your response to the nearest whole number.) Use the money multiplier to find the new value for the money supply if open market operations increase the r by $300 billion. The money supply is now $ billion. (Round your response to the nearest whole number.)

Survey Of Economics

10th Edition

ISBN:9781337111522

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter19: Money Creation

Section: Chapter Questions

Problem 8SQP

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