Assume that banks hold no excess reserves and the public does not change their currency holdings.If currency is $800,total bank reserves are $2,000,and checkable deposits are $20,000,then
(a).what is the monetary base?

Question

Quizplus · Accepted Answer

The Answer is The monetary base totals $2,800. (b).what is the money supply? The money supply amounts to $20,800. (c).if the required reserve ratio is 10% and banks hold no more excess reserves,then what will the money supply be if the Fed increases total bank reserves by $100? The money supply will be $21,800.

Assume That Banks Hold No Excess Reserves and the Public