1. The average person in Atlantica would deposit $95 out of every $100 they have into their bank accounts, keeping the rest as cash in their wallets. The central bank has instructed the commercial banks to hold 3% of all bank deposits as reserves.

1. Estimate the extended money multiplier
2. Assume the average person puts in $3,000 into their bank accounts. Based on the extended money multiplier calculated in part (i), calculate the total amount which the money supply in the banking system will eventually increase to. Show all steps involved in the calculation.

2. Is it ever possible for the simple money multiplier value to be the same as the extended money multiplier value? Justify your answer with a numerical example.