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B. Monetary System: The monetary base of Moneyland is $450 million. The current-deposit ratio (cr) is...

B. Monetary System: The monetary base of Moneyland is $450 million. The current-deposit ratio (cr) is 0.2 and reserve-deposit ratio (rr) is 0.4. Calculate the money multiplier and money supply. Show your work. (5 points each)

Money Multiplier =

Money Supply =

c. Quantity Theory of Money In the country of Wiknam, assume that V is constant. Real GDP (Y) grows by 3% per year and the money stock (M) grows by 6% percent per year. What is the growth rate of the price level, P? Use the equation: % ∆ M + % ∆ V = % ∆ P + % ∆ Y. Show our work. (7 points)

D. Money Demand   Assume k = .20, h = 700B, Y = 5,000B, P = 1, and i = .05. Calculate (M/P)d, the demand for real money balances. Use the equation (M/P)d = (kY – h(i)). Show your work. (8 points)

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