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

The Monetary System End of Chapter Problem An economy has a monetary base of 1,000 $1 bills. Calculate the money supply in scenarios 3 - d. Then answer part e. a. All money is held as currency Money supply = $ 1000 b. All money is held as demand deposits. Banks are required to hold 100% of deposits as reserves. Money SUPPIY = $ 1000 c. All money is held as demand deposits. Banks hold 20% of deposits as reserves. Money SUPPIY = $ 5000 c. All money is held as demand deposits. Banks hold 20% of deposits as reserves. Money SUPP]? = $ 5000 (1. People hold equal amounts of currency and demand deposits. Banks hold 20% of deposits as reserves. Round Money SUPPIY = 55' 166667 to the nearest dollar. Incorrect e. The central bank wants to increase the money supply by 10%. In each of the above scenarios, by how much must it Monetary base increase = $' 10 increase the monetary base? Incorrect