Question 3 a) Assume there is an economy with a single bank, and the central bank sets the reserve requirement ratio at 11%. Assume also that the only bank had no transactions (i.e., no loans, reserves, or deposits) prior to an individual who deposited RM2000 with the bank. Based on the information given, show your workings. i. Construct a balance sheet. (5 Marks) ii. Calculate the total deposits, reserves, and loans created. (6 Marks) iii. Calculate the size of the money multiplier for this economy? (2 Marks) b) Measurement of money supply are M1, M2, and M3. Explain how to measure M2. (2 Marks) c) Money supply increases in the economy when the central bank reduces the bank rate. Explain how it is possible to increase the money supply in economy (5 Marks) [Total: 20 Marks]