H3. The Fed wants to change the reserve requirement ratio in order to increase the money supply (Which is currently $5,000 in demand deposits. There is no currency in this economy and banks hold no excess reserves.) by $500. The money multiplier is currently 5. What is the current reserve requirement ratio and how should the Fed change it? Carefully Explain.

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Q: 1 a) Calculate the money multiplier. b) Calculate the bank deposit multiplier.

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Q: 4. Problems and Applications Q2 If the Fed wants to increase the money supply, it can sell If the…

A:

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