Suppose that the required reserve ratio is 6%, currency in circulation is $1900 billion, the amount of checkable deposits is $1550 billion, and excess reserves are $250 billion.

(a)Calculate the money supply, the currency deposit ratio, the excess reserve ratio, and the money multiplier.

(b)Suppose the central bank conducts an unusually large open market sale of bonds to commercial banks of $ 1,000 billion to prick an ongoing housing bubble. Assuming the ratios you calculated in part (a) remain the same, predict the change of the money supply, and the resulting money supply in the market after the sale.