Question: Simple deposit multiplier = 1 + ( XA K Suppose checkable deposits are $15 million and increase by $2 million due to an open market

Simple deposit multiplier = 1 + ( XA K Suppose checkable deposits are $15 million and increase by $2 million due to an open market purchase. In addition, the required reserve ratio is 8 percent. Assuming there are no cash leakages and zero excess reserves, calculate each of the following: a. Required reserves b. Excess reserves c. What is the money supply due to this initial injection in the economy? d. What is the total change in checkable deposits? e. How much of this was brought about by the banking system through the creation of loans? f. Is this considered contractionary or expansionary monetary policy

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