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Problem 13-07 (algo) The Money Multiplier Process Initial Loan Loan Loan University Bank Bank etc. deposit Bank Bank Deposit #2 Deposit ($100) #3 Deposit #4

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Problem 13-07 (algo) The Money Multiplier Process Initial Loan Loan Loan University Bank Bank etc. deposit Bank Bank Deposit #2 Deposit ($100) #3 Deposit #4 Excess reserves: $25 Excess reserves: $6.25 Excess reserves: $1.56 Excess reserves: $0.39 Required reserves: $75 Required reserves: $18.75 Required reserves: $4.69 Required reserves: $1.17 Instructions: Round your responses to two decimal places. a. What volume of loans can the banking system in the figure support? $ 33 b. If the reserve requirement were 35 percent rather than 75 percent, what would the system's lending capacity be? $Problem 13-05 (algo) If a bank has total reserves of $200,000 and $1,000,000 in deposits, how much money can it lend if the required reserve ratio is Instructions: Enter your responses as a whole number. a. 10 percent? 100,000 b. 7.5 percent?Problem 14-08 algo POLICY PERSPECTIVES From the end of 2010 to the end of 2011, M1 changed from $2,156 billion to $2,460 billion. Instructions: Round your responses to one decimal place. If M1 decreased be sure to include a negative sign (-) in front of that number. a. By what percentage did M1 change? es de b. If the Fed had used a fixed rule of 3 percent growth of the money supply (M1), how large would M1 have been in 2011? billionProblem 14-09 algo POLICY PERSPECTIVES If the price level increases by 0.2 percent for every $100 billion increase in the money supply, by how much might prices rise if the Fed increases total reserves by $80 billion and the reserve requirement is 0.20? Instructions: Round your response to two decimal places. de

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