Question 4 The following table shows the balance sheet of the banking system of the Country Magei La Da. The banking system holds $100 billion of excess reserve and the public does not hold any cash in hand. Liabilities Demand deposit Billion ($) 1,000 Assets Reserve Loans Total Billion ($) 400 600 1,000 Total 1,000 a) Identify and explain briefly whether reserve in the banking system is included in money supply. (2 marks) b) Calculate the actual reserve ratio and required reserve ratio. (4 marks) c) Draw a new balance sheet of the banking system if no excess reserve is held by the banking system. Show your workings. (5 marks) d) Critical evaluate how the central bank uses THREE possible methods to increase the money supply. (9 marks)