312) When the economy is in monetary equilibrium, suppose banks initially wish to hold cash reserves (R) equal to some fraction (ch) of the deposits (D) that they provide, and that the general public wish to hold cash in circulation (C) as a fraction (CD) of deposits (D) that they hold: R = cut) and C = ch. Let's assume cs is 15 per cent and cpis 25 per cent. (20 marks) a) What is the value of the money multiplier? Show how you obtained this gure. (5 marks) b) What is the value of the bank deposit multiplier? Show how you obtained this figure. (5 marks) Suppose now that this initial equilibrium is disturbed by a central bank selling of $50 million of government bonds to the public. (2) What is the change in the monetary base resulting from this open market operation? Show how you obtained this gure. {5 marks) d) What is the final change in the money supply (i.e., the total change in the money supply once a new monetary equilibrium is achieved)? Show how you obtained this figure