1.If you deposit $100 in a bank account and the reserve ratio is 20 percent. a.What…

1.If you deposit $100 in a bank account and the reserve ratio is
20 percent.
a.What is the minimum amount of money banks will be required to
keep in reserves? How much loans can banks make at most? What is
the money multiplier? How much money can be created from $100 of
reserves?
b.If the fed raises the required reserve ratio to 30 percent.
What is the minimum amount of money banks will be required to keep
in reserves? How much loans can banks make at most? What is the
money multiplier? How much money can be created from $100 of
reserves?
2. How does the money supply change? Does it increase or
decrease? What happens to the interest rate when the MS
changes?