Question 5 Needs Grading Suppose that: - banks hold $5,000 in reserves - the public holds $2,000 in cash = required reserves ratio: R = 20% A. Calculate the value of the money multiplier (3 marks) B. Calculate the amount of the money supply (5 marks) c. As the festival Eid Al Adha approaches, the public reduces bank deposits by withdrawing $1,000 from the deposit account to increase spending. As a result, the public now holds $3,000, and banks have $4,000. Calculate the new value of the money supply. (5 marks) D. From the calculation above, describe the relationship between bank deposits withdrawals and money supply: positive, negative or neutral? (2 marks)