Suppose that each of the 500 young agents has deposits worth 200 goods with a bank no matter what the return on deposits is. Assume the reserve requirement is 10% and the monetary base is $5000. Letx>n,where notations have their usual meanings.

a.Calculate the total money stock. (2 marks).

b.Find the value of a unit of fiat money. (2 marks).

c.Find the price of a good in units of fiat money. (2 marks).

d.How many goods would the government acquire if it increased the monetary base by 50%?

e.What is the real value of investment by banks? (2 marks).