Committee members tell you the reserve ratio is 0.1 and the cash-to-deposit ratio is 0.3. They ask you what directive they should give to the open market desk. You tell them, being as specific as possible, using the money multiplier.

b. They ask you for two other ways they could have achieved the same end. You tell them.

c. Based on the AS/AD model, tell them what you think the effect on the price level of your policy will be. LO3