An economy has a monetary base of 1,000 $1 bills. Calculate the money supply in scenarios (a)-(d) and then answer part (e).

a.All money is held as currency.

b.All money is held as demand deposits. Banks hold 100 percent of deposits as reserves.

c.All money is held as demand deposits. Banks hold 20 percent of deposits as reserves.

d.People hold equal amounts of currency and demand deposits. Banks hold 20 percent of deposits as reserves.

e.The central bank decides to increase the money supply by 10 percent. In each of the above four scenarios, how much should it increase the monetary base?