Suppose that CBA bank has total deposits of $6,000,000 and keeps $750,000 in total reserves. Let's assume you withdraw $15,000 from the bank

a) How much is the reserve ratio? Write the equation that is used to calculate the reserve ratio.

b) Before you withdraw $15,000, what is the maximum amount that the bank can lend out? (assume the reserve ratio you calculated in part (a) is the required reserve ratio)

c) What is the simple deposit multiplier? Write the equation that is used to calculate the simple deposit multiplier.

d) When you withdraw $15,000, will the total deposits increase or decrease? How much is the total change in deposits in the banking system?

e) How much is the change in the money supply when you withdraw $15,000?

f) Will the real-world deposit multiplier be larger or smaller than the multiplier calculated in part (c)? Why?