Questlon 9 5 pts Pretend you are in charge of conducting monetary policy at the

Question

Questlon 9 5 pts Pretend you are in charge of conducting monetary policy at the New York Fed and you have the . following initial conditions. Initial Conditions rr/D 10 C = 600 billion D = 1200 billion Given the above information (show all work on your exam sheet): i) Calculate the MB ii) Calculate the money multiplier (mm). ii) What is the money supply (use MS mm x MB)? NOTE: This work is to be done using the Exam Sheet 2 Part 2 A& You will upload this work, along with other work to be done on this sheet, to question #13 on this exam. Enter the word "Finished" into the text-box below when ready to move on. HTML Edito Paragraph

Explanation / Answer

i) MB = C + D = 600 billion + 1200 billion = $ 1800 billion

ii) mm = 1/0.1 = 10

iii) Money supply = mm x MB = 10 x 1800 billion = $ 18000 billion

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