Question: i am having issue with part e i keep getting wrong and alof of people also have it wrong on chegg. how can i find
a. How large is the money supply (M1)? billion b. Are the banks fully utilizing their lending capacity? Banks currently have billion in exces reserves. Now assume that the public deposited another $15 billion in cash in transactions accounts c. What would happen to the money supply initially (before any lending takes place)? Assuming the $15 billion in cash is not new money in the system, M1 will d How much would the total lending capacity of the bankng system be after this portfolio switch? e. How large would the money supply be if the banks fully utizzed their lending capacity
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