1) The Central Bank of Kenya buys a treasury security back from Mr. Mush Onhanger, via his broker, for $200. John deposits this money into his bank account. The bank now has $200 in additional deposit, so it loans out the maximum allowable amount to earn interest. Assume that the reserve ratio is 45%.

a. Calculate the money multiplier for Kenya. Show your working.

b. How much additional money will this action create in the economy? Show your working.