Question 1. Consider an economy with the following: the required reserve ratio is 9 percent, currency in circulation is $660 billion, the amount of checkable deposits is $985 billion, and the excess reserves are $19.7 billion. (a): Compute the money supply (M1), the currency deposit ration (c), the excess reserve ratio (e), and the money multiplier (m). [4 marks] (b): Suppose the central bank carried out an open market purchase of bonds from commercial banks equal to $1000 billion. What is the effect of this action on the money supply (M1)? Assume the ratios (r, c, e) computed in part (a) remain steady.