Question 1 3 pts We derived the money multiplier as a function of (C/D) and (R/D) as m = M/B = (C+D)/(C+R) = (C/D + 1)/(C/D + R/D). This expression assumes no excess reserves. Suppose we are more careful and add excess reserves in the monetary base. Let E be the amount of excess reserves, so E/D is the ratio of excess reserves to deposits. Derive the money multiplier in terms of C/D, R/D, and E/D. (a) Assume that the currency-deposit ratio is 0.12, the required reserve ratio is 0, and the excess reserves to deposit ratio is 0.23. Find the money multiplier. (b) Assume that the monetary base is $5.5 trillion. Find the money supply in trillion dollars. (c) If the Fed purchases treasury bills worth $2 trillion, what is the new monetary base? Money multiplier (value) : Money supply in trillion dollars: New monetary base in US$ trillion