(5 points) Consider the following information for a hypothetical economy: Total reserves (R) = $500 billion Currency (C) = $400 billion
A. If banks are holding $80 billion in required reserves, and the required reserve ratio (RR/D) is 0.10, what is the dollar value of checkable deposits (D)?
B. What is the dollar value of excess reserves (ER)?
C. What is the dollar value of the money supply (M)? What is the dollar value of the monetary base (MB)? What is the value of the money multiplier (m)?
R=$500Bb, C=$400billiona) Reserve ratio=reserve requirement/Demand Deposits=1/10If $80billion are in reserve, therefore the demand deposits which are also called checkabledeposits D=80billion *…