1aGiven the following information

Reserve requirement for demand deposits = 12%

Cash in circulation = RM 210 millions

Demand Deposits = RM 574 millions

Money Market Deposits = RM287 millions

Reserves loaned from Central Bank = RM 15 millions

Non-loan reserves in Central Bank = RM94 millions

Excess Reserves = RM 0.96 millions

Assume that the money market deposit is not subject to reserve requirements.

1. Calculate the value of money multiplier for M1 and M2
2. If you wish that the Central Bank will expand its monetary base (M1) so money supply (M1) would grow by 3% over the next one year, how much should the monetary base change in order to realise the changes?

1b)Consider the following balance sheet of Berjaya Bank. The required reserve ratio on demand deposits is 8%.

Berjaya Bank

Aset / Assets (million $)	Liabiliti / Liabilities (million $)
Rizab / Reserves 30 Pinjaman / Loans 150 Sekuriti / Securities 140	Deposit semasa 290 Demand deposits Modal bank / Net Worth 30

1. Calculate the banks excess reserves
2. Suppose Berjaya Bank sells $40 million of its securities to the central bank. Show the balance sheet of Berjaya Bank after this transaction