Please be organized, and you can wriite in a paper with a pen or pencil and attach the image that would be more help full instead typing it. adress all the qustions given below

11-30 - n 93' 456 .ll" 480/06 Homework Assignment 3 (Total Points 32) I. Measures of Money Supply: Q.1. Suppose the country X has the following monetary asset information as of year 2010: Cash in hands of the public = $300b (where 'b' represents billion) Demand Deposits (DD) = $400b Other Checkable Deposits = $150b Traveler's checks = $50b Savings Type accounts = $2000b Money Market Mutual Funds (MMMF) = $1000b Small Time Deposits = $500b Large Time Deposits = $450b (a) Calculate M1 for Country X (4 points) (b) Calculate M2 for Country X (4 points) (c) Which item is not included in the calculations of M1 and M2? (4 points) 2. Given the following information, what would be the value of M1? (4 points) Small time deposits Checking deposits Savings-type accounts Money market mutual funds ll. Creation of Money: Q-1 Suppose that the T account for Sovereign Bank is as follows and the reserve requirements ratio is 20% ASSETS LIABILITIES Cash Reserves $ 1,000 Demand Deposits $5,000 Loans 5 4,000 $ 5,000 $5,000 a) What is the size of the money multiplier?(4p0.im:s) b) With the present required ratio how much total money banking system can create? (4 points) 11:31 - 'n' as \\1 as..." 48%.5 2. Given the balance sheet below and assuming a required reserve ratio of 20 percent, how much (in dollar terms) must the bank hold in required reserves? (4 Liabilities and Net Worth $ 5 million Demand deposits $ 80 million $10 million $15 million $20 million Net worth $ 20 million Federal Reserve accounts Loans $50 million TOTAL LIABILITIES TOTAL ASSETS $100 million PLUS NET WORTH $100 million If the required reserve ratio is 0.2, and a bank has $100 million in demand deposits and $40 million in property and buildings, how much reserves it needs to hold? (4p01'nts)