Given the following information:Savings deposits = $1845b …
Given the following information:Savings deposits = $1845b Demand Deposits = $760bRequired reserve ratio = 10% Currency in circulation = $520.0bVault Cash = $11b Household money market mutual fund = $1753.3bNegotiable Certificates of deposit = $940.0b Banking system deposits with the Fed = $88bHousehold money market deposits accounts = $1588b Non-negotiable Certificates of deposit = $1629bInstitutional money market accounts = $2764b Treasury Bills = $222ba. Calculate the MB.b. Calculate m1 as illustrated in practice problems. Interpret the multiplier.c. Calculate M1 using the multiplier method.d. Check using the definition of M1 method.e. Repeat parts b-d for M2.f. Suggest a specific action by the Federal Reserve if the macroeconomic models suggest that a $425 billion dollar decrease in the M2 money supply is required to bring the economy back to a full employment equilibrium.g. (Bonus: 6 additional points) recalculate the monetary base, multiplier, and money supply for M2 (using the equation approach) if households respond to lower interest rates by moving $40b from their savings accounts to their checking account and shift $164b from their money market deposit account to currency holdings.