Attempts $$ Keep the Highest $/5$

$5.$ The reserve requirement, open market operations, and the money supply

Consider a system of banking in which the Federal Reserve uses required reserves to control the money supply $($as was the case in the United States before $2008).$ Assume that banks do not hold excess reserves and that households do not hold currency, so the only money exists in the form of demand deposits. To further simplify, assume the banking system has total reserves of $$130,000.$ Determine the money multiplier as well as the money supply for each reserve requirement listed in the following table.

$\backslash$table$[[\backslash$table$[[$Reserve Requirement$],[($Percent$)]],$Simple Money Multiplier,$\backslash$table$[[$Money Supply$],[($Dollars$)]]],[5,-,],[10,-,]]$

A higher reserve requirement is associated with a $$ money supply.

Suppose the Federal Reserve wants to increase the money supply by $$2,000.$ Maintain the assumption that banks do not hold excess reserves and that