Suppose? that:
r? = required reserve ratio? = 0.100
c ?= ?{C/D}? = currency ratio? = 0.45
e? = ?{ER/D}? = excess reserve ratio? = 0.05
MB? = the monetary base? = ?$5,000 billion
Given that the formula for the money multiplier is left parenthesis StartFraction 1 plus c Over r plus e plus c EndFraction right parenthesis 1+c r+e+c?, find the value for M?, the money supply.
The money supply is ?$---------billion.? Round your response to the nearest whole? number.)
Use the money multiplier to find the new value for the money supply if open market operations increase the monetary base by ?$100 billion. The money supply is now ?$--------billion.