In 2001, Domingo Cavallo, Argentina's economy minister, wanted Banco Central de la Repblica Argentina (the central bank

In 2001, Domingo Cavallo, Argentina's economy minister, wanted Banco Central de la República Argentina (the central bank of Argentina) to reduce the reserve requirement applied to private banks. Suppose Argentina's total bank deposits equaled Ps 100 billion (100 billion pesos), the banking system had zero excess reserves, and the reserve ratio was 10%. Calculate the effect, if any, that Cavallo's policy would have on Argentina's monetary base, as well as the banking system's total reserves and excess reserves, if the reserve ratio was reduced to 8%. What would be the qualitative change in Argentina's M2 money multiplier?