Suppose the minimum reserve requirement is 20%. Use this information to answer the following questions. Round your answers to the nearest whole number, enter them as numbers not words, and do not put any other symbols in your answers. Make sure to put a negative sign in your answer to signify any decreases in the variable of interest when appropriate.

6. The value of the money multiplier is.

7. Assuming a checkable deposits-only system and no excess reserves, if John makes a cash deposit of $1000, the money supply will increase by $.if the Federal Reserve conducts an open market purchase of $1000, the money supply will increase by $.

Suppose the government is weighing different fiscal policy options, and they would like your help estimating their impact. They are trying to decide whether to decrease transfers to households by $1000 or decrease government purchases of goods and services by $1000. If the marginal propensity to consume is 0.75, what effect with the two policy options have on real GDP?

Round your answers to the nearest whole number, enter them as numbers not words, and do not put any other symbols in your answers. Make sure to put a negative sign in your answer to signify any decreases in the variable of interest when appropriate.

8. Change in GDP from $1000 transfer decrease = $

9. Change in GDP from $1000 government spending decrease = $

Suppose the table below shows the balance sheet for XYZ Bank. Assume the minimum reserve requirement is 5%.

Assets

Liabilities

Loans = $500

Deposits = ?

Reserves = $200

Treasury bills = $300

Based on the information in the table, calculate the following values. Round your answers to the nearest whole number, enter them as numbers not words, and do not put any other symbols in your answers. Make sure to put a negative sign in your answer to signify any decreases in the variable of interest when appropriate.

10a. Reserve ratio =% (FYI: enter this as a percentage, not a decimal!)

10b. Required reserves = $

10c. Excess reserves = $