c. In Miniland, there is $2 000 000 in currency that can either be held by the public or used by banks as reserves. The banks' desired reserve-deposit ratio is 10%.

(i) If the public of Miniland decide to hold 50% in hand and place the remaining 50% in the bank, what will be the size of the money supply in the economy?

(ii) If the public of Miniland decide to hold less currency, decreasing the proportion they hold from 50% to 25%, what will be the size of the money supply in the economy?

(iii) What can you conclude about the money supply based on the results obtained in parts (i) and (ii)?

(iv) Why is the real-world deposit multiplier smaller than the simple multiplier (1/RR), where RR is the reserve ratio?