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Suppose that: r=required reserve ratio = 0.15 C = {C/D} = currency ratio = 0.30 e = {ER/D} = excess reserve ratio = 0.01 MB
Suppose that: r=required reserve ratio = 0.15 C = {C/D} = currency ratio = 0.30 e = {ER/D} = excess reserve ratio = 0.01 MB = the monetary base = $3,000 billion Given that the formula for the money multiplier is 1 + c rte + 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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