As the central banking system of the United States, the Federal Reserve System (Fed) has three specific objectives for m

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As the central banking system of the United States, the FederalReserve System (Fed) has three specific objectives for monetarypolicy: maximizing employment, stabilizing prices, and moderatinglong-term interest rates. Use the information given to finish thefollowing questions. (1) The table includes real data of the moneystock measures and their components in June 2020 (06/2020) andOctober 2021 (10/2021), which are obtained from the FederalReserve. Use the model of money supply, fill the empty spots(values of the variables) in the table below. Also, use the data of10/2021 to show step-by-step solutions for monetary base (B), totaldeposit (D), currency deposit ratio (cr), reserve deposit ratio(rr) and money multiplier (m) in October 2021. Item Definition06/2020 ($ as billion) 10/2021 ($ as billion) M Money supply (as M2$) 18,175.7 21,187.1 C Currency (in circulation $) 1,958.3 2,202.9R Reserve (balance $) 3,043.6 4,128.1 B Monetary base ($) D Totaldeposit ($) cr Currency-deposit ratio rr Reserve-deposit ratio mMoney multiplier (2) In October 2021, the rate of inflation (CPI)piked at a 30-year high of 6.2% compared the level one year beforein 2020. At the early November 2021 meeting, as a response to highinflation expectation, the Fed approved a plan to gradually reduceits asset purchases of $120 billion a month and slow down itsbond-buying program by June 2022. Use your language to explain howthis decision will affect money supply? Suppose, in the middle2022, we have C = 2,000 ($ billion), cr = 0.16 and rr = 0.20. Thenwhat are the values of D, R, B and M? And how much is the new moneymultiplier (m)?