Question: Assume that the monetary base ( B ) is $100 billion, the reserve-deposit ratio ( rr ) is 0.1, and the currency-deposit ratio ( cr

Assume that the monetary base (B) is $100 billion, the reserve-deposit ratio (rr) is 0.1, and the currency-deposit ratio (cr) is 0.1.

a. What is the money supply?

b. Ifrrchanges to 0.2, butcris 0.1 andBis unchanged, what is the money supply?

c. Ifrris 0.1 andcris 0.2, butBis unchanged, what is the money supply?

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