Question: Suppose that: r= required reserve ratio = 0.10 C = (C/D) = currency ratio = 0.25 e = (ER/D) = excess reserve ratio =

Suppose that r = required reserve ratio = 0.10 C = (C/D) = currency ratio = 0.25 e = (ER/D) = excess reserve ratio = 0.05 MB

Suppose that: r= required reserve ratio = 0.10 C = (C/D) = currency ratio = 0.25 e = (ER/D) = excess reserve ratio = 0.05 MB = the monetary base = $5,000 billion 1+c Given that the formula for the money multiplier is find the value for M, the money supply. r+e +c The money supply is S billion. (Round your response to the nearest whole number.) Use the money multiplier to find the new value for the money supply if open market operations increase the monetary base by $300 billion. The money supply is now $ billion. (Round your response to the nearest whole number.)

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