Money Multiplier Practice (OLD)

The video tutorial explains the concept of the money multiplier in economics, using various scenarios to illustrate how changes in reserve requirements and Federal Reserve actions, such as buying or selling bonds, affect the money supply. The tutorial provides step-by-step calculations of the multiplier and the resulting changes in the money supply, emphasizing the impact of reserve requirements on the multiplier effect. It concludes with a practical example of a bank deposit to reinforce the concept.

What happens to the money supply when the Fed sells $20 worth of bonds with a 100% reserve requirement?

How do you calculate the change in money supply when depositing $50 with a reserve requirement of 20%?