QUESTION ONE The central bank has purchased foreign exchange from the mines amounting to uss 36 milion at a price of K10 per dollar, thus increasing the monetary base by K280 milion. Assuming there is no leskage into currency in circulation and excess reserves, what is the increase in deposits when the required reserve ratio is 5N Compute the money multiplier when the currency to deposits ratio is 30%, the required reserves tatio is 5%, and the excess reserves to deposits ratio is 5% The Bank of Zambia recently announced a decrease in the statutory reserve ratio from 12% to 5% Using information in (b) above, what was the multiplier before the announcement? a b. d. What is the difference between the deposit multiplier and the money multiplier QUESTION ONE The central bank has purchased foreign exchange from the mines amounting to uss 36 milion at a price of K10 per dollar, thus increasing the monetary base by K280 milion. Assuming there is no leskage into currency in circulation and excess reserves, what is the increase in deposits when the required reserve ratio is 5N Compute the money multiplier when the currency to deposits ratio is 30%, the required reserves tatio is 5%, and the excess reserves to deposits ratio is 5% The Bank of Zambia recently announced a decrease in the statutory reserve ratio from 12% to 5% Using information in (b) above, what was the multiplier before the announcement? a b. d. What is the difference between the deposit multiplier and the money multiplier