PRECEDING QUESTION: Suppose that the reserve requirement is 5.5%. If 4 firms deposit a total of $10 million into a demand deposit account at the First national Bank, what is the total deposit creation in the banking system using the simple deposit multiplier? Ans: 181.818 million

Consider the preceding question using the money multiplier. If the currency ratio is 40% and the excess reserve ratio is 1%, what is the change in money supply? (8 Points)