Final answer:
The simple deposit multiplier is calculated as 5, and the required reserve ratio is calculated as 20%. These figures are based on the changes in reserves and the money supply given in the question. The actual reserve requirements may vary according to the Federal Reserve's regulations.
Step-by-step explanation:
The question is asking us to determine the simple deposit multiplier and the required reserve ratio based on a change in reserves and the money supply. The simple deposit multiplier is essentially the ratio of the change in the total deposits (or money supply) to the change in reserves, which is calculated by dividing the change in the money supply by the change in reserves. Conversely, the required reserve ratio can be found by dividing the change in reserves by the change in the money supply.
If the reserves change by $10 million and the money supply changes by $50 million, the simple deposit multiplier can be calculated as $50 million divided by $10 million, which equals 5. This means that for every dollar held in reserves, the money supply can increase by $5. To calculate the required reserve ratio, we would divide $10 million by $50 million, yielding a ratio of 0.20 or 20%.
However, this is a simplification and the actual reserve requirements can depend on a number of factors, including the size of a bank's deposits. The Federal Reserve has different reserve requirement tiers for different levels of deposits.