Assume the total checkable deposits available at commercial banks are $4700 billion. The central banks sets the required reserve ratio to 21%. The conslidated balance sheet of the central bank is as follow:

Assets ($ billion) Liabilities ($ billion)

Securities 1100 Reserve 3800

Loans to commercial banks 2700

The following questions are independent from each other:

A. What is the maximum amount that the central bank can lend to commercial banks?

$Answer for part 1 billion

B. If the central bank decided to decrease the required reserve ratio by 3%, the excess reserve would increase by $ Answer for part 2 billion.

C. The central bank decided to sell $800 billion government securities to commercial banks, by how much can the money supply be destroyed?

$ Answer for part 3 billion