Question

6. If reserves in the banking system increase by $100, then checkable deposits will increase by $400 in the simple model of deposit creation when the required reserve ratio is eserve retioKeserves De posi+s 7. If the required reserve ratio is one-third, curreney in circulation is $300 billion, checkable deposits are $900 billion, and there is no excess reserve, then the MI money multiplier is 8. If the required reserve ratio is 10 percent, currency in circulation is $400 billion, ch deposits are $800 billion, and excess reserves total $0.8 billion, then the money supply is billion. 9. Assuming initially that the required reserve ratio 10%, the currency-deposit ratio-40%, and the excess reserve ratio = 0, an increase in the required reserve ratio to 15% causes the MI money multiplier toeverything else held constant.