Question: In Problem 11, the banks have no excess reserves. Suppose that the Bank of Nocoin, the central bank, increases bank reserves by $0.5 billion. a.

In Problem 11, the banks have no excess reserves. Suppose that the Bank of Nocoin, the central bank, increases bank reserves by $0.5 billion.
a. What happens to the quantity of money?
b. Explain why the change in the quantity of money is not equal to the change in the monetary base.
c. Calculate the money multiplier.

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