Money multiplier problems.

1. Let currency holdings be 400b. and demand deposits at commercial banks be 600b. If banks hold reserves of 10 percent against deposits, find:
1. the money supply
2. the monetary base
3. the money multiplier, and
4. the effect on the money supply of a one billion dollar securities purchase by the Fed.

2. Let reserve holdings at commercial banks be 6 percent and the currency to deposits ration be .4. Find the money multiplier and the effect on the money supply of a five billion dollar bond sale by the Fed.

3. Currency by the public are 500 b. and deposits are 500b. If commercial banks hold five percent reserves against deposits, find the following variables and the effect on each of them of a ten billion dollar bond sale by the Fed.

1. the money supply
2. the monetary base
3. the money multiplier
4. currency holdings, and
5. demand deposits