Assume there is a single bank in the economy with a desired reserve to deposits ratio (res) of 0.25

a) Assume the currency to deposits ratio (cur) is equal to zero. The initial monetary base is equal to $1000 USD. What is the composition of the single banks balance sheet (both assets and liabilities) after the process of multiple expansion of deposits? Compute the value of money supply.

b) Assume the currency to deposits ratio is 0.1. Assume the monetary base is equal to 1000 USD. Compute the value of money supply in this economy.

c) Compute the level of currency and the level of reserves in this economy. The monetary base is 1000 USD, the reserve to deposit ratio is 0.25 and the currency to deposit ratio is 0.1 [Hint: make use of both the definition of money supply and the definition of the currency to deposits ratio to compute the level of currency]

d) Assume the economy starts with the $1000 USD in monetary base in the hands of the public. The economy has a reserve to deposit ratio of 0.25 and a currency to deposit ratio of 0.1. Show the balance sheet for the single bank in the economy after the first step of deposits-loans-re deposits. Show the final balance sheet of the single bank and of the Federal Reserve Bank after the process of multiple expansion of deposits has stopped. [Hint: first you need to compute how much of the $1000 USD would the public deposit to have a cur = 0.1]