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Suppose that the money multiplier is fixed and the Feds balance sheet is
| Federal Reserve Bank |
| Asset | Liabilities |
| Securities | $900 | Currency held by nonbank public | $700 |
| Gold | $100 | Vault cash held by banks | $100 |
| | | Reserve deposits | $200 |
| Total assets | $1000 | Total liabilities | $1000 |
and the commercial banks balance sheet is
| Consolidated Balance Sheet of Banks |
| Assets | Liabilities |
| Vault cash | $100 | Deposits | $3000 |
| Reserve deposits | $200 | | |
| Loans | $2700 | | |
| Total assets | $3000 | Total liabilities | $3000 |
Suppose that the Fed increases the monetary base by 15%. The money supply will
| | A. | increase by $555 |
| | B. | increase by $450. |
| | C. | increase by $360 |
| | D. | increase by $150 |
| | E. | increase by $1000 |
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