Assume that the money multiplier m = (1+c)/(r+e+c). Where c is the currency deposit ratio, e is the excess reserve ratio and r is the required reserve ratio. a) With examples, explain what will cause an increase in the ratios c, e and r b) Explain the implications of an increase in each of the ratios on the ability of the central bank to increase money supply by increasing the monetary base. Page 2 of 2 c) Assume that consumers trust in the banking sector improves because of more transparent banking practices. How will this affect the money multiplier and the central banks monetary control?