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6. (This question follows Q5.) Use the following notation: C is currency in circulation outside banks, R is bank reserves, D is deposits, L is

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6. (This question follows Q5.) Use the following notation: C is currency in circulation outside banks, R is bank reserves, D is deposits, L is loans, MB is the monetary base, M is total money supply, r is the required reserve ratio, and c is the currency-to-deposit ratio. Assume c = 0.05 and r = 0.2. Suppose all commercial banks hold zero excess reserves. Following the $5 million open market purchase, what will be the change of C, R, D, L, MB and M after the money supply process is completed? Calculate: 111: AC

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