1. With an initial deposit of GHS 10,000, and the current reserve requirement of 12% in Ghana (following the last MPC meeting), illustrate how much additional money can be created with 10 banks in the economy.

2. Best National Bank reports interest-sensitive assets of GHS 870 million and interest- sensitive liabilities of GHS 625 million during the coming month. Is the bank asset sensitive or liability sensitive? What is likely to happen to the banks net interest margin if interest rates rise? And what if they fall? [4 marks]