Fin 100 Homework Chapter 4 E2 Chapter 5 Pl, P6 E2: As the executive of a bank or thrift institution you are faced with an intense seasonal demand...

$1 million

$1 million

P6: Assume a financial system has a monetary base of $25 million. The required reserves

ratio is 10 percent, and there are no leakages in the system.

A.

What is the size of the money multiplier? 1/.10% = 10%

B.

What will be the system’s money supply? $25 million x 10= $250 million