Calculate the total money supply of the us

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Assignment:

Calculating the Money Supply:

Calculate the total money supply of the U.S. if it has a monetary base of $20 billion, the required reserve ratio is 10 percent, the currency to deposit ratio is 30 percent, and the banks are holding 20 percent in excess reserves.
Assume the business cycle is approaching the prior GDP peak and is about to move from recovery into the expansionary phase of the business cycle. Calculate the change in the total money supply if banks push all of their excess reserves into the economy at once dropping their excess reserves ratio to zero. (note: use the ratios for C/D and R/D and the monetary base in part a for this calculation).

Reference no: EM133543963

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