Question: 39. Assume that the monetary base (B) is $100 billion, the reserve-deposit ratio (r) is 0.1, and the currency-deposit ratio (cr) is 0.1. a. What

39. Assume that the monetary base (B) is $100 billion, the reserve-deposit ratio (r) is 0.1, and the currency-deposit ratio (cr) is 0.1. a. What is the money supply? b. If ry changes to 0.2, but cr is 0.1 and B is unchanged, what is the money supply? c. If my is 0.1 and or is 0.2, but B is unchanged, what is the money supply? 40. Construct a bank balance sheet with the following items: reserves, deposits, loans, securities, capital, and debt. Choose values so that the reserve-deposit ratio is 10 percent and the leverage ratio is 10. Give an example of a change in asset values that would push bank capital to zero. What happens when bank capital is gone

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