Economics questions:

#11. (30 pts) In the U.S., currency in circulation (C) is $1.2 trillion and the monetary base (B) is $3.7 trillion. Assume the reserve-deposit ratio (or) and the currency-deposit ratio (cr) are both 0.25. (a) (10 pts) What is the size of bank reserves (R)? What is the money multiplier? What is the money supply? What is the velocity of money if nominal GDP is $17 trillion? (b) (10 pts) If the FOMC increases bank reserves (R) by $0.5 trillion and banks choose to hold all the additional reserves rather than loan them out, what is the new money supply? [5 PT BONUS: What is the new money supply if instead banks loan out 50% of the additional new reserves and households deposit all the additional loans?] (c) (10 pts) Assume that the velocity of money is constant and real GDP is growing at 1%. Use the numbers in part (a) to answer the next question. If the Fed wishes to keep the price level constant, how much (in dollars) do they need to increase the money supply?#11. (30 pts) Assume the monetary base (B) is $100 billion, the reserve-deposit ratio (ry) is 0.1, and the currency-deposit ratio (cr) is 0.1. Show your work. (a) (10 pts) What is the money supply? (b) (10 pts) If er changes to 0.2, but re is 0.1 and B is unchanged, what is the money supply? (c) (10 pts) Using your answer from part (b), what is the velocity of money if nominal GDP is $800 billion? What is the resulting level of inflation if velocity is constant, real GDP increases by 2%, and the money supply increases by 4%