Refer to the information provided in Scenario below to answer the questions that follow.

SCENARIO: The following table shows the changes in deposits, reserves, and loans of 4 banks as a result of a $100,000 initial deposit in Bank No. 1. Assume all banks are loaned up.

NEW DEPOSIT REQUIRE RESERVE LOANS

BANK NO 1 $100,000.00 $5,000.00 $95,000.00

BANK NO 2 $95,000.00 $4,750.00 $90,250.00

BANK NO 3 $90,250.00 $4,512.50 $85,737.50

BANK NO 4 $85,737.50 $4,286.87 $81,450.63

a)What is the required reserve ratio?

b)What is the money multiplier in this economy?

c)Based on the initial $100,000 deposit, the money supply will, at most, expand to how much?

d)If the required reserve ratio were changed to 10%, total loans of Bank No. 2 will change to