Problem
During the recent 2007-2009 financial crisis in the United States the excess reserves ratio increased to unprecedented values of around 90-100%. At the same time, checkable deposits and currency remained mostly unchanged, whereas the monetary base increased substantially (the Fed did not change the required reserves ratio). Using the money multiplier model, describe how banks' behavior affected the excess reserves ratio, the money multiplier, and the money supply during this period.
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.