a) In some country called A ,the households have one million one dollar coins.

i) If people fail to deposit any of the coins but instead hold all one million coins as currency, how large is the money supply? Explain.

ii) If people deposit the entire one million coins in banks that are required to observe a 100 per cent reserve requirement, how large is the money supply? Explain

iii) If people deposit the entire one million coins in banks that are required to observe a 10 per cent reserve requirement, how large could the money supply become?

iv) In the previous question, what portion of the money supply was created due to the banks?

v) Compare your answer in part (ii) to part (iii). Explain why they are different.