Suppose that r = required reserve ratio = 0.15 c={C/D} = currency ratio = 0.25 e={ER/D}= excess reserve ratio = 0.05 MB the monetary base = $3,000 billion Given that the formula for the money multiplier is 1+C r+e+c find the value for M, the money supply. The money supply is $ 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 r by $300 billion. The money supply is now $ billion. (Round your response to the nearest whole number.)

Suppose that r = required reserve ratio = 0.15 c={C/D} = currency ratio = 0.25 e={ER/D}= excess reserve ratio = 0.05 MB the monetary base = $3,000 billion Given that the formula for the money multiplier is 1+C r+e+c find the value for M, the money supply. The money supply is $ 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 r by $300 billion. The money supply is now $ billion. (Round your response to the nearest whole number.)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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i will 5 upvotes.

Suppose that:
r = required reserve ratio = 0.15
C= {C/D} = currency ratio = 0.25
e={ER/D} = excess reserve ratio = 0.05
MB
= the monetary base = $3,000 billion
Given that the formula for the money multiplier is
1+C
r+e+c
find the value for M, the money supply.
The money supply is $ 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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