When a central bank increases bank reserves by $1, the money supply rises by more than $1. The amount of extra money created when the central bank increases bank reserves by $1 is called the money multiplier.
In an imaginary economy, the initial money supply is $1100, of which $550 is currency held by the public. The desired reserve-deposit ratio is 0.4.
Find the increase in money supply associated with increases in bank reserves of $1, $5, and $10.