Suppose the following data apply:
Total reserves: ......................................$36 billion
Transactions deposits:........................... $600 billion
Cash held by public: ..............................$300 billion
Bonds held by public: ...........................$400 billion
Stocks held by public: ...........................$140 billion
Gross domestic product: ...........................$8 trillion
Interest rate: ..........................................6 percent
Required reserve ratio: ....................................0.05
1. How large is the money supply (M1)?
2. How much excess reserves are there?
3. What is the money multiplier?
4. What is the available lending capacity?