Scenario 29-2. The Monetary Policy of Tatsi is controlled by the country's central bank known as the Bank of Tatsi. The local unit of currency is the Taz. Aggregate banking statistics show that collectively the banks of Tatsi hold 300 million Tazes of required reserves, 75 million Tazes of excess reserves, have issued 7,500 million Tazes of deposits, and hold 225 million Tazes of Tatsi Treasury bonds. Tatsi prefer to use only demand deposits and so all money is on deposit at the bank.

Refer to Scenario 29-2. Suppose the Bank of Tatsi loaned the banks of Tatsi 10 million Tazes.

Suppose also that both the reserve requirement and the percentage of deposits held as excess reserves stay the same.

1. Calculate the Money Multiplier

2. By how much would the money supply of Tatsi change?