The banking system has $65 billion in total reserves of which $63 billion are required reserves. There are $1,100 billion in checkable deposits and $500 of currency in circulation.

a) (3 points) What is the amount of the money supply (M1) in dollars?

b) (3 points) What is the amount of the monetary base (MB) in dollars?

c) (6 points) If the Federal Reserve were to announce an increase in the "discount rate" would this tend to increase or decrease the money supply? Explain.