1. The monetary base represent the (__________) of central bank.

Suppose that households wished to maintain $1.00 in pocket money (currency and coin) and $10.00 in liquid savings assets for every $1.00 in their checking accounts (transaction deposits). Banks choose excess reserves to be ten cents for every dollar of transaction deposits.

1. if the required reserve ratio is 8%

(1) the deposit multiplier is (__________)

(2) the money multiplier is (__________)

2. if the required reserve ratio is 10%

(1) the deposit multiplier is (__________)

(2) the money multiplier is (__________)

3. if the required reserve ratio is 12%

(1) the deposit multiplier is (__________)

(2) the money multiplier is (__________)