.0 Duration in years Amounts in Assets EUR Loans and advances to central banks and administrations . 58 729 Loans and advances to credit institutions...

Question 1:

Derive and explain the complete formula (multiplier) for the M1 money supply, and explain how changes in required reserves, excess reserves, the currency ratio, the nonborrowed base, and borrowed reserves affect the money supply. (Show all the steps for derivation of M1 money multiplier.)

Question 2:

LOOK AT PICTURE ATTACHED