a.If you decide to hold $1,000 less cash than usual and therefore deposit $1,000 more cash in the bank, what effect will this have on checkable deposits in the banking system?Answer in terms of the required reserve ratio, assume the rest of the public keeps its holdings of currency constant.

b."The money multiplier is necessarily greater than 1." Is this statement true, false, or uncertain? Explain your answer.

c.If the Fed lends five banks a total of $500 million but depositors withdraw $100 million and hold it as currency, what happens to reserves and the monetary base? Use T-accounts to explain your answer.