Consider that there is only one bank and its balance sheet is as follows Use it to answer the next questions.

Assets		Liabilities
Reserves	$26,000	Demand Deposits	$160,000
Loans	$134,000

Let rr_D = 10%, e= 5% and c=10%.

1- What is the value of this banks undesired excess reserves?

a. +$13,000

b. +$5,000

c. +$2,000

d. -$4,000

e. -$15,000

2- What is the value of the money multiplier for this problem?

a. 10

b. 5.5

c. 5.0

d. 4.4

e. 4.0

3- At the outset of this problem, what is the level of the money supply (M1)?

a. $125,000

b. $160,000

c. $176,000

d. $242,000

e. $320,000

4- In order to reach a final equilibrium, the money supply will have to change by:

a. +$2,000

b. +$8,800

c. +$26,000

d. +$71,500

e. -$71,500

5- At the final equilibrium, the value of the undesired excess reserves will be:

a. +$2,000

b. +$1,000

c. -$2,000

d. -$8,000

e. None of the above.