This is my Question

1. We know that the desired reserve ratio for the banking system is 10%. Assume that the banking system has an excess reserve equal to $4 billion. Further, the currency in circulation equals $450 billion, and the total amount of checkable deposits equals to $900 billion. Calculate the following: 1) Desired reserves held by the banking system 2) Total reserves held by the banking system 3) Monetary base 4) Total money supply (M1) 5) The money multiplierRequired reserve ratio [rrd] = 10% Excess reserves {ER} 2 $4 billion Currency in circulation {CC} = $450 billion Total amount of checkable deposits [(30] = $900 billion {a1 Required reserves held by the banking system {RR} = (ID 3: mi Required reserves held by the banking system 2 590-0 billion 1 10% = 590 billion b} Total reserves held by the banking system [TR] 2 RR + ER Total reserves held bythe banking system = $90 billion 1- $4 billion 2 $94 billion c] Monetary base {ME} = (I + TR Monetary base 2 5450 + $94 = $544 billion cl} Total money supply {MI} 2 CD + CC Total money supply {Ml} = $900 billion + $450 billion = $1350 billion {e} Money multiplier = M1 3' MB Money multiplier = $1,350 billion 3' 5544 billion = 2.43