Pretend you are in charge of conducting monetary policy at the New York Fed and you have the following initial conditions.
rr/D = .10
C = 900 b%3D
D= 1800 b
ER = 0
Given the above information (show all work on your exam sheet):
i) Calculate the MB.
ii) Calculate the money multiplier (mm).
iii) What is the money supply (use MS = mm x MB)?
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