Chapter 13. The Federal Reserve System: Pre - Class & In - Class Activities Packet Name/I.D. Number: ______________________________________________________________ Section:________________ Date: ___________ Part 4. Economic Equations and Graphs

2. If reserves increase by $2 million and the required reserves ratio is 10 percent, what is the change in the money supply?

4. Reserves change by $10 million, and the money supply changes by $50 million. What does the simple deposit multiplier equal? What does the required reserve ratio equal?

6. If the federal funds rate is 6 percent and the discount rate is 5.1 percent, to whom will a bank be more likely to go for a loan: another bank or the Fed?

ECONOMICS

ROGER A. ARNOLD THIRTEENTH EDITION