1. In the hypothetical country of Westlandia, banks are required to hold 20% of checkable deposits as reserves. The public holds 50% of the loans as currency in circulation and redeposits the remaining 50% percent of the loans. a. Complete the table (calculations should be to no more than two decimal places). Round Deposits Required Reserves of 20% Excess Reserves New Loans 50% of loan proceeds are held as currency in circulation by people Round Deposits Required Reserves of 20% Excess Reserves New Loans (Enter your (Enter your 5 response here.) response here.) (Enter your response here.) (Enter your response here.) (Enter your (Enter your (Enter your (Enter your 6 response response here.) here.) response here.) response here.) (Enter your (Enter your (Enter your 7 response Loan proceeds redeposited response here.) response here.) (Enter your (Enter your 8 response here.) response here.) here.) (Enter your response here.) (Enter your (Enter your (Enter your (Enter your response here.) (Enter your response here.) (Enter your 50% of loan proceeds are held as currency in circulation by people (Enter your response here.) (Enter your response here.) (Enter your response here.) (Enter your response here.) (Enter your response here.) (Enter your response here.) Loan proceeds redeposited (Enter your response here.) (Enter your response here.) (Enter your response here.) (Enter your response here.) (Enter your response here.) (Enter your 1 $500 response here.) (Enter your response here.) (Enter your response here.) (Enter your (Enter your response here.) response here.) 9 response here.) response here.) response here.) response here.) (Enter your (Enter your (Enter your (Enter your (Enter your (Enter your (Enter your (Enter your 2 response here.) response here.) response here.) response here.) response here.) response here.) 10 response here.) response here.) (Enter your response here.) (Enter your response here.) (Enter your response here.) (Enter your (Enter your (Enter your (Enter your (Enter your 3 response here.) response here.) response here.) response here.) response here.) (Enter your response here.) (Enter your (Enter your Totals response here.) response here.) (Enter your response here.) (Enter your (Enter your response here.) response here.) (Enter your response here.) (Enter your (Enter your 4 response here.) response here.) (Enter your response here.) (Enter your response here.) (Enter your response here.) (Enter your response here.) b. Calculate the new money supply. File Tools View BU204 Hanta_Rajaonarivelo_Unit8_ 0 (Enter your response here.) c. Calculate the money multiplier. (Enter your response here.) Round Deposits Required Reserves of 20% Excess Reserves New Loans (Enter your (Enter your (Enter your (Enter your 3 response here.) response here.) response here.) response here.) 2. In the hypothetical country of Middlelandia, banks are required to hold 20% of checkable deposits as reserves. Also, the public holds none of the loans as currency in circulation and redeposits all the loans. (Enter your (Enter your (Enter your 4 response here.) response here.) response here.) (Enter your (Enter your (Enter your 5 a. Complete the table (calculations should be to no more than two decimal places). response here.) response here.) response here.) (Enter your (Enter your (Enter your 6 Round Deposits Required Reserves of 20% Excess Reserves New Loans None of loan proceeds are held as currency in circulation by response here.) response here.) response here.) (Enter your response here.) (Enter your (Enter your (Enter your (Enter your Loan proceeds redeposited 7 response here.) response here.) response here.) response here.) people (Enter your (Enter your (Enter your (Enter your 8 response (Enter your here.) response here.) response here.) response here.) 1 $500 100 400 response here.) 200 (Enter your (Enter your (Enter your 9 response response (Enter your (Enter your 2 response here.) response here.) (Enter your response (Enter your (Enter your (Enter your here.) here.) response here.) (Enter your response here.) here.) response here.) response response here.) here.) (Enter your (Enter your (Enter your (Enter your 10 response here.) response here.) response here.) response here.) response (Enter your response here.) (Enter your response here.) None of loan proceeds are held as currency in circulation by people (Enter your response here.) (Enter your response here.) (Enter your response here.) (Enter your response here.) (Enter your response here.) (Enter your response here.) (Enter your response here.) (Enter your Loan proceeds redeposited (Enter your response here.) (Enter your response here.) (Enter your response here.) (Enter your response here.) (Enter your response here.) (Enter your response here.) (Enter your response here.) (Enter your response here.) here.) Screens 5-6 of 11 Focus 140% File Tools View BU204_Hanta_Rajaonarivelo_Unit8_ None of loan D (Enter your response here.) (Enter your response here.) (Enter your response here.) (Enter your response here.) (Enter your response here.) (Enter your response here.) None of loan proceeds are held as currency in circulation by people (Enter your response here.) (Enter your response here.) (Enter your response here.) (Enter your response here.) (Enter your response here.) (Enter your response here.) (Enter your response here.) (Enter your response here.) Loan proceeds redeposited (Enter your response here.) (Enter your response here.) (Enter your response here.) (Enter your response here.) (Enter your response here.) (Enter your response here.) (Enter your response here.) (Enter your response here.) proceeds are Round Deposits Required Reserves of 20% Excess Reserves New Loans held as currency in Loan proceeds redeposited Round Deposits Required Reserves of 10% Excess Reserves New Loans circulation by people Totals (Enter your response here.) (Enter your response here.) (Enter your response here.) (Enter your response here.) (Enter your response here.) (Enter your (Enter your (Enter your (Enter your 1 $500 response here.) response here.) response here.) response here.) (Enter your (Enter your (Enter your (Enter your 2 response response here.) here.) response here.) response here.) b. Calculate the new money supply. (Enter your response here.) (Enter your (Enter your (Enter your 3 response response here.) here.) response here.) (Enter your (Enter your (Enter your response response response here.) here.) here.) c. Calculate the money multiplier. (Enter your response here.) (Enter your (Enter your (Enter your 5 response here.) response here.) response here.) (Enter your (Enter your (Enter your 6 response response here.) here.) response here.) 3. In the hypothetical country of Eastlandia, banks are required to hold 10% of checkable deposits as reserves. Also, the public holds none of the loans as currency in circulation and redeposits all the loans. a. Complete the table (calculations should be to no more than two decimal places). (Enter your (Enter your (Enter your 7 response here.) response here.) response here.) 8 (Enter your response here.) (Enter your response (Enter your response here.) here.) Screens 7-8 of 11 Focus + 140% File Tools Screens 9-10 of 11 View BU204_Hanta_Rajaonarivelo_Unit8_ Round Deposits Required Reserves of 10% Excess Reserves New Loans None of loan proceeds are held as currency in circulation by people Loan proceeds redeposited 4. Describe in detail the differences between the three hypothetical countries' money supplies, money multipliers, and likely impacts on each economy. (Enter your response here.) 9 10 (Enter your response here.) (Enter your response here.) (Enter your response here.) (Enter your response here.) (Enter your response here.) (Enter your response here.) (Enter your (Enter your response here.) response here.) (Enter your response here.) (Enter your response here.) (Enter your response here.) (Enter your Totals response here.) (Enter your response here.) (Enter your response here.) (Enter your response here.) (Enter your response here.) b. Calculate the new money supply. (Enter your response here.) c. Calculate the money multiplier. (Enter your response here.) (Enter your response here.) (Enter your response here.) 5. Explain how each of the following situations changes the quantity of money (money supply) in the economy, based on its computed change in money supply. a. The Federal Reserve System buys bonds. (Enter your response here.) b. The Federal Reserve System auctions credit. (Enter your response here.) c. The Federal Reserve System raises the discount rate. (Enter your response here.) d. The Federal Reserve System raises the reserve requirement. (Enter your response here.) DFocus B + 140%