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Required reserve ratio, rrr = 0 . 1 0 Currency in circulation, C = $ 4 0 0 billionCheckable deposit, D = $ 8 0

Required reserve ratio, rrr =0.10Currency in circulation, C = $400 billionCheckable deposit, D = $800 billionExcess reserve, ER =0.8 billionMoney supply, M1= $1,200 billion1. Calculate the values for the currency ratio, c and the excess reserve ratio e.2. Calculate the values for the money multiplier, m and provide in words its meaning?3. What is the effect of an increase in borrowed money, BR by 5 billion on money supply?4. Suppose the central bank decides to issue a $10 billion bond. Given this information, what is the effect on the money base level, MB?

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