How large is the money supply

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Reference no: EM132181460

Assume the following data describe the Banking system:

Total Reserve $300 billion , Transaction Deposit $900 billion

Cash held by public $200 Billion , Required Reserve Ratio .25 (25%) . Do the following :

1. How large is the money supply (M1)?

2. How large are required Reserves?

3. How large are Excess Reserves?

4. By how much could the Banking system increase their lending capacity ?

5. BY how much could the Banking system increase Money supply (M1)?

Reference no: EM132181460

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