Problem 3 Refer to the following Fake basic fractional reserve system with the following balance sheet to answer the following questions. Liabilities Deposits $,5500 Assets Reserves $1,000 Loans $4,000 T. Bills Total Total $5,500 1. Refer to problem 3. The missing values in the above balance sheet are respectively * a) $400, $5,500 b) $0, $5,1001 c) $5,500, $400 d) $400, $5,100 2. Refer to problem 3. Suppose that the bank is fully loaned up. According to the above balance sheet, what is the required reserve ratio? * a) 21.5% b) 7% c) 20% d) 72.2% 3. Refer to problem 3. Now suppose that the required reserve ratio is 10%. The new value of reserve, and loans are respectively. (Assume that the bank holds no excess reserve too after those changes and is fully loaned up).* a) $550, $4,000 b) $0, $4,550 c) $550, $3,450 d) $550, $4,550 4. Refer to problem 3. Holding the required reserve ratio at 10%. Assume that the central bank purchases the whole value of T. Bills, and the bank grants the maximum loans possible. How much the money supply change as a result of this policy?* a) $400 b) $4,000 c) $2,000 d) $200