The Monetary System - Work It Out: Question 2 In the economy of Robberia, the monetary base is $3950. People hold 35% of their money in the form of currency (and thus 65% as bank deposits). Banks hold 20% of their deposits in reserve. Throughout this question, enter all answers to THREE places after the decimal. a. What are the reserve-deposit ratio, the currency-deposit ratio, the money multiplier, and the money supply? The reserve-deposit ratio equals The currency-deposit ratio equals The money multiplier equals The money supply equals $ In the economy of Robberia, the monetary base is $3950. People hold 35% of their money in the form of currency (and thus 65% as bank deposits). Banks hold 20% of their deposits in reserve. Throughout this question, enter all answers to THREE places after the decimal. b. One day, a rash of street robberies strikes fear in the population, and people now want to hold only 15.000% of their money in the form of currency. If the central bank does nothing, what is the new money supply? Note: Banks continue to hold 20% in reserve and the monetary base is still $3950. The new money supply equals $ In the economy of Robberia, the monetary base is $3950. People hold 35% of their money in the form of currency (and thus 65% as bank deposits). Banks hold 20% of their deposits in reserve. Throughout this question, enter all answers to THREE places after the decimal. c. In the face of this panic, the central bank wants to conduct an open-market operation to keep the money supply at its original level. Calculate, in dollars, how much the central bank needs to transact. The central bank sells $ worth of bonds