Suppose the banking system has total deposits of Rs 1,000 billion . Nepal Rastra Bank's required reserve ratio is 4% and Nepal Rastra Bank has…

Suppose the banking system has total deposits of Rs 1,000 billion. Nepal Rastra Bank's required reserve ratio is 4% and Nepal Rastra Bank has announced that the reserve ratio is increases by 1 percent to control the liquidity in the banking system.

a. What will be the required reserves before increasing the reserve ratio?

b. What will be the required reserves after increasing the reserve ratio?

c. What will be the short of reserves after increase in the reserve ratio?

d. What will be the money multiplier before and after increase in the reserve ratio?

e. Calculate the maximum amount of contraction of money supply in the banking system?