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Do not only give the solutions, but also clearly explain your derivations.Need help please Consider a monetary system which is in equilibrium in period t.

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Do not only give the solutions, but also clearly explain your derivations.Need help please

image text in transcribed
Consider a monetary system which is in equilibrium in period t. Currency in circulation, reserves and demand deposits are given by Ct, R, and De, respectively, where Ct = 200 Re = 100 = 1000 Compute then the following variables for period t: 1. The monetary base (B,). 2. The money supply (M.). 3. The currency-deposit ratio (cr;). 4. The reserve-deposit ratio (rr;). 5. The money multiplier (m;). Assume now that the currency-deposit ratio changes, and becomes equal to 1/10. The reserve-deposit ratio and the monetary base remain constant at the values which you found above. As a result, the monetary system converges to a new equilibrium in period 7. Compute then the following variables for period T: 6. The money multiplier (mr). 7. Currency in circulation (CT). 8. The reserves (RT). 9. Demand deposits (Dr). 10. The money supply (MT). Note that the money supply in this exercise refers to MI

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