The summation of currency (C) and demand deposits (D) is equivalent to M1. The central banks monetary base, MB is equivalent to currency (C) plus reserves (R). Suppose R is the amount of reserves, RR is required reserves, ER is excess reserves, r is the required reserve ratio, e is the excess reserves ratio and c is the currency ratio. If R = RR + ER, RR = r x D, ER = e x D, C = c x D, derive the money multiplier, m for M1. Explain why the simple deposit multiplier overstates the money multiplier you computed.