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Round 2 two decimal places Currency held by public Reserve-deposit Bank reserves Money supply (in billions) ratio (in billions) (in billions) December 1931 $4.59 0.095

Round 2 two decimal places

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Currency held by public Reserve-deposit Bank reserves Money supply (in billions) ratio (in billions) (in billions) December 1931 $4.59 0.095 $3.11 $37.3 December 1932 $4.82 0.109 $3.18 $34.0 Note, the Fed added $0.30 billion in reserves, of which $0.23 went into the hands of the public ($4.82 - $4.59) and $0.07 billion were added to bank reserves ($3.18 - $3.11). Calculate the quantity of additional reserves the Federal Reserve would have had to inject into the economy in 1932 to prevent the money supply from falling, given that the public increased the amount of currency it held and that banks increased the reserve-deposit ratio? Hint, your calculation of additional reserves should be added to the $0.30 that the Fed injected in 1932. Calculate the decrease in total amount of bank deposits decreased from 1931 to 1932. 3.Calculate the money supply at the end of 1932 if the public had not decided to hold more currencyop) 1932, but the actions of the Federal Reserve and the banks remained the same

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