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4) {20 points) Matt deposits 5M 50,000 of currency into his new checking account at the Migronian Commercial Bank (MCB). The required reserve ratio is

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4) {20 points) Matt deposits 5M 50,000 of currency into his new checking account at the Migronian Commercial Bank (MCB). The required reserve ratio is 10% and the liquidity ratio is 0 (nobody keeps cash). a. MCB required reserves increase by and excess reserves (amount available to be lent) increase by b. The money multiplier in this economy is c. As a result of Matt's deposit, checking account deposits in the banking system as a whole (including the original deposit) could eventually increase up to a maximum of d. If the liquidity ratio was 10% instead of 0%, the money multiplier in this economy would be

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