Macroeconomics 6th Edition by Robert Hall,Marc Lieberman

Exercise 4

Suppose a country, Zeekland, uses a unit of account called the "zeek." Its banks have no reserve requirements, but banks always want to hold 3 percent of their total checking deposits as cash, and another 2 percent as accounts with the Zeekland Central Bank. If the central bank buys 50 million zeeks worth of government bonds, by how much will the country's money supply increase?