Consider an economy with the following quantities: C = currency in circulati

Consider an economy with the following quantities:

C = currency in circulation

D = checkable deposits

c = C/D = currency-deposit ration = 0.45

ER = excess reserves

e = ER/D = excess reserves-deposit ratio = 0.02

RR = required reserves = $50

r = required reserve ratio = 0.05

M = money supply (M1)

R = total reserves

MB = monetary base

m = (M1) money multiplier

a) What are deposits D?

b) Using your answer to part (a) find excess reserves ER and currency C.

c) What is the monetary base MB?

d) Using your answer to part (a) and (b) find M.

e) Using e r and c find m.

f) Without using e r and c find m again.