The total money supply M has two components: bank deposits D and cash holdings C, which we assume bear a constant ratio C/D = c, 0 < c < 1. The high-powered money H is defined as the sum of cash holdings held by the public and the reserves held by the banks. Bank reserves are a fraction of bank deposits, determined by the reserve ratio r, 0 < r < 1.(a) Express the money supply M as a function of high-powered money.
a) True
b) False