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Suppose the Federal Reserve sets the reserve requirement at 10 percent, banks hold no excess reserves, and no additional currency is held. Instructions: In part

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Suppose the Federal Reserve sets the reserve requirement at 10 percent, banks hold no excess reserves, and no additional currency is held. Instructions: In part a, round your answer to 2 decimal places. In parts b and c, enter your answers as a whole number. If you are entering any negative numbers be sure to include a negative sign ( -) in front of those numbers. a. What is the money multiplier? b. By how much will the total potential money supply change if the Federal Reserve changes the amount of reserves by $50 million? $ million c. Suppose the Federal Reserve wants to decrease the total money supply by $600 mallion, By how much should the Federal Reserve change reserves to achieve this goal? $million

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