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Suppose that: r= required reserve ratio =0.20 c={C/D}= currency ratio =0.25 e={ER/D}= excess reserve ratio =0.05 MB= the monetary base =$1,000 billion Given that the
Suppose that: r= required reserve ratio =0.20 c={C/D}= currency ratio =0.25 e={ER/D}= excess reserve ratio =0.05 MB= the monetary base =$1,000 billion Given that the formula for the money multiplier is (r+e+c1+c), find the value for M, the money supply. The money supply is $ billion. (Round your response to the nearest whole number.) Use the money multiplier to find the new value for the money supply if open market operations increase the monetary base by $100 billion. The money supply is now $ billion. (Round your response to the nearest whole number.)
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