Find the new value for the money supply

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Reference no: EM131621946

Suppose? that:

r? = required reserve ratio? = 0.100

c ?= ?{C/D}? = currency ratio? = 0.45

e? = ?{ER/D}? = excess reserve ratio? = 0.05

MB? = the monetary base? = ?$5,000 billion

Given that the formula for the money multiplier is left parenthesis StartFraction 1 plus c Over r plus e plus c EndFraction right parenthesis 1+c r+e+c?, find the value for M?, the money supply.

The money supply is ?$---------billion.? Round your response to the nearest whole? number.)

Use the money multiplier to find the new value for the money supply if open market operations increase the monetary base by ?$100 billion. The money supply is now ?$--------billion.

Reference no: EM131621946

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