Suppose the Federal Reserve sets the reserve requirement at 10%, banks hold no excess reserves, and no additional currency is held. Instructions: In part a, round your answer to one decimal place. In parts b and c, enter your answers as a whole number. If you are entering a negative number include a minus sign. a. What is the money multiplier? b. How much will the total money supply change by if the Federal Reserve changes reserves by-$60 million? $ million Suppose the Federal Reserve wants to decrease the total money supply by $500 million. c. How much should the Federal Reserve change reserves to

ENGR.ECONOMIC ANALYSIS
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Author:NEWNAN
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Chapter1: Making Economics Decisions
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Suppose the Federal Reserve sets the reserve requirement at 10%, banks hold no excess reserves, and no additional currency is held.
Instructions: In part a, round your answer to one decimal place. In parts b and c, enter your answers as a whole number. If you are
entering a negative number include a minus sign
a. What is the money multiplier?
b. How much will the total money supply change by if the Federal Reserve changes reserves by -$60 million?
$
million
Suppose the Federal Reserve wants to decrease the total money supply by $500 million.
c. How much should the Federal Reserve change reserves to achieve this goal?
$
million
Transcribed Image Text:Suppose the Federal Reserve sets the reserve requirement at 10%, banks hold no excess reserves, and no additional currency is held. Instructions: In part a, round your answer to one decimal place. In parts b and c, enter your answers as a whole number. If you are entering a negative number include a minus sign a. What is the money multiplier? b. How much will the total money supply change by if the Federal Reserve changes reserves by -$60 million? $ million Suppose the Federal Reserve wants to decrease the total money supply by $500 million. c. How much should the Federal Reserve change reserves to achieve this goal? $ million
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