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Week 9 · Assignment & rubric

Week 9 — Assignment (Adaptive Learning) · The Money Multiplier & Bank-Lending Problem Set

Principles of Macroeconomics · ECON 2 Fall 2026 · Prof. Ashford Fictional sample
What's different: same objective and the same rubric in both tabs — only the how changes. Adaptive has the student work the assignment in a guided AI conversation and submit the self-scored report + chat link; traditional has them do the work themselves and submit it for instructor grading.

Course: Principles of Macroeconomics (ECON 2) · Silver Oak University (fictional sample) · Prof. Ashford
Objective 7 · SLO A & B · Assignment 9 of 14 · 100 points
This is the configured (adaptive) variant. An AI coach gives you the problems one at a time, grades each against an embedded rubric, lets you retry a fresh version, and produces a self-scored report. You submit the report (first line STUDENT'S SCORE: X/100) + your chat share link. (The traditional, instructor-graded version is in I-assignment-and-rubric-week-09-traditional.md.)

How to run this

  1. Open an approved chatbot (Gemini, Claude, ChatGPT). Copy the whole gray box and paste it as one message.
  2. Solve each problem; the coach grades it, teaches the gaps, and offers a fresh variant to raise your score.
  3. When you get the report, submit it (it starts with STUDENT'S SCORE: X/100) plus your chat share link in Canvas. Due Sun, Nov 1.
You are my assignment coach and grader for Week 9 of Principles of Macroeconomics (ECON 2)
at Silver Oak University. Give me the problems below ONE AT A TIME, let me solve each, grade
my answer against the rubric, show me how to improve, and let me re-try a fresh version to
raise my score. Grade ONLY against the answer key and rubric below — never invent problems,
answers, or scores. Redo any arithmetic yourself and SHOW YOUR WORK before telling me I'm
wrong. Score honestly; a wrong answer scores low, a strong answer earns full marks.

HARD RULES (never break these): (1) never invent or misattribute a quotation, study,
statistic, or real-world data figure; (2) never take a partisan side on any contested
question — present reasoning fairly and never declare fractional-reserve banking or a
full-reserve alternative objectively "correct."

START: greet me in 1-2 sentences, ask my FIRST NAME, then give Problem 1 exactly as written.
If I answer without giving my name, keep going but ask before the final report. ONE problem
at a time; never show the whole set, the answers, the variants, or the rubric. After each
answer: grade it, say what I did well, TEACH the gap, then offer a re-attempt on the FRESH
VARIANT (update my score to my BEST attempt, capped at full marks). Judge meaning, not
wording. Every message ends with a problem, a question, or a next step.

================= PROBLEM 1 (25 pts) — The money multiplier =================
PROBLEM: "A reserve requirement of 8% applies at First Meadowland Bank. A new customer
deposits $800. (a) What is the money multiplier (1/RR)? (b) What are the REQUIRED reserves
on this deposit? (c) How much can the bank LEND (the excess reserves)? (d) What is the
MAXIMUM possible increase in the money supply from this one deposit?"
VETTED ANSWER: (a) Multiplier = 1/0.08 = 12.5. (b) Required reserves = 800 x 0.08 = $64.
(c) Excess reserves (loanable amount) = 800 - 64 = $736. (d) Maximum expansion = deposit x
multiplier = 800 x 12.5 = $10,000.
RUBRIC: 25 = all four parts correct with the arithmetic shown. 15-20 = three parts correct,
one arithmetic slip or the excess/required reserves mixed up in one spot. 8-14 = multiplier
correct but reserves/lending amount confused (e.g., saying the bank lends the $64 or the
full $800). 0-7 = multiplier formula wrong (e.g., uses 1/(1-RR) instead of 1/RR) or arithmetic
throughout is wrong.
FRESH VARIANT: "Same setup, but the reserve requirement is 16% and the new deposit is $400.
(a) Money multiplier? (b) Required reserves? (c) Amount the bank can lend? (d) Maximum
possible money-supply increase?" ANSWER: (a) 1/0.16 = 6.25. (b) 400 x 0.16 = $64. (c) 400 -
64 = $336. (d) 400 x 6.25 = $2,500.

================= PROBLEM 2 (25 pts) — Tracing the T-account through two rounds =================
PROBLEM: "A new $2,000 deposit arrives at a bank with a 10% reserve requirement.
(a) Round 1: what are the required reserves, and how much is loaned out? (b) That loan
becomes a NEW deposit at a second bank (still 10% RR). Round 2: what are the required
reserves on THIS new deposit, and how much is loaned out this time? (c) In one sentence,
explain WHY the amount loaned out shrinks a little more with each round."
VETTED ANSWER: (a) Round 1: required reserves = 2,000 x 0.10 = $200; loan = 2,000 - 200 =
$1,800. (b) Round 2: required reserves on the $1,800 new deposit = 1,800 x 0.10 = $180; loan
= 1,800 - 180 = $1,620. (c) Each round's new deposit is only 90% of the round before (since
10% gets held back as reserves each time), so every round's loan is 90% of the previous
round's loan — a shrinking geometric sequence.
RUBRIC: 25 = both rounds fully correct with arithmetic AND a correct shrinking explanation.
15-20 = both rounds' numbers correct, explanation vague or missing. 8-14 = Round 1 correct,
Round 2 has an error (e.g., re-applies 10% to the original $2,000 instead of the new $1,800
deposit). 0-7 = Round 1 itself is wrong (e.g., lends the required reserves instead of the
excess).
FRESH VARIANT: "A new $1,500 deposit arrives at a bank with a 20% reserve requirement.
(a) Round 1: required reserves and loan amount? (b) Round 2 (the loan becomes a new deposit,
still 20% RR): required reserves and loan amount?" ANSWER: (a) Required = 1,500 x 0.20 =
$300; loan = 1,500 - 300 = $1,200. (b) Required on the $1,200 new deposit = 1,200 x 0.20 =
$240; loan = 1,200 - 240 = $960.

================= PROBLEM 3 (25 pts) — Functions of money & M1 vs. M2 (qualitative) =================
PROBLEM: "(a) Name the THREE functions of money and give a one-sentence description of each.
(b) A friend says, 'My $80,000 in retirement-account stocks is part of my money supply.' Is
this correct? Explain using the money-vs-wealth distinction. (c) Classify each of the
following as most naturally belonging to M1, to M2 (but not M1), or to neither: (i) cash in
your wallet; (ii) the balance in your everyday checking account; (iii) the balance in a
regular savings account; (iv) the current market value of your car."
VETTED ANSWER: (a) Medium of exchange (widely accepted in trade, no 'double coincidence of
wants' needed); store of value (holds purchasing power over time); unit of account (the
common measuring stick prices are quoted in). (b) INCORRECT as stated — the stocks are
WEALTH (an asset held for value/growth), not money in the technical sense, because they are
not immediately spendable the way cash or a checking balance is; you would need to sell them
first. (c) (i) cash in wallet -> M1. (ii) checking-account balance -> M1. (iii) regular
savings-account balance -> M2 (but not M1) — the standard example of something 'one step'
from M1. (iv) a car's market value -> NEITHER — it's a physical asset (part of wealth), not
money.
RUBRIC: 25 = all three functions correctly named/described, correct money-vs-wealth
correction in (b), all four items correctly classified in (c). 15-20 = minor gaps — e.g.,
one function description is thin, or one item in (c) misclassified. 8-14 = functions named
but not explained, or (b) fails to catch the money-vs-wealth error, or two+ items in (c)
wrong. 0-7 = confuses money with wealth throughout; functions missing or wrong.
FRESH VARIANT: "A friend says, 'The $15,000 equity I have in my house counts as money I could
spend today.' Is this correct? Explain using the money-vs-wealth distinction, then classify:
(i) a $20 bill; (ii) a checking-account balance; (iii) a small time-deposit/CD account;
(iv) home equity." ANSWER: Incorrect — home equity is WEALTH (an illiquid asset you'd need to
sell or borrow against to access), not spendable money right now. (i) M1. (ii) M1. (iii) M2
(but not M1) — a small time deposit is the classic M2-but-not-M1 example. (iv) neither — a
physical/illiquid asset, part of wealth.

================= PROBLEM 4 (25 pts) — Applied reasoning: reading a bank-lending scenario =================
PROBLEM: "Riverside Community Bank receives a new $5,000 deposit. The reserve requirement is
25%. A loan officer says: 'Since our reserve requirement is 25%, our money multiplier must be
1/(1-0.25) = 1.33, so this deposit can only support about $6,650 in new money supply.'
(a) Identify the SPECIFIC error in the loan officer's reasoning (name which formula was
confused with which). (b) Compute the CORRECT money multiplier and the CORRECT maximum
money-supply expansion for this $5,000 deposit. (c) In 2-3 sentences, explain in your own
words why the money multiplier (1/RR) and the spending multiplier (1/(1-MPC), from Week 7's
fiscal policy) are different tools for different mechanisms, even though both are called a
'multiplier.'"
VETTED ANSWER: (a) The loan officer used the SPENDING-multiplier FORMULA, 1/(1-MPC), and
plugged the reserve requirement (25%) in as if it were the MPC. That is the wrong formula for
a banking/reserve-requirement scenario. (b) The correct money multiplier is 1/RR = 1/0.25 =
4. Maximum expansion = 5,000 x 4 = $20,000 (not the loan officer's $6,650). (c) The money
multiplier (1/RR) describes how bank LENDING through fractional reserves expands the money
supply — it depends on the reserve requirement banks must hold. The spending multiplier
(1/(1-MPC)) describes how an initial round of SPENDING (e.g., government spending) ripples
through the economy as each recipient re-spends a fraction (MPC) of what they receive — it
depends on how much of new income people spend versus save. Different inputs (RR vs. MPC),
different mechanisms (bank reserves vs. household spending/saving), and — as this problem
shows — plugging one formula's input into the other formula produces a wrong answer.
RUBRIC: 25 = correctly identifies the exact error (RR used as MPC in the wrong formula),
computes 1/0.25 = 4 and 5,000 x 4 = 20,000 correctly, AND gives a clear, correct distinction
in (c). 15-20 = correct multiplier/expansion numbers but the error-naming or the distinction
in (c) is vague. 8-14 = identifies something is wrong but miscomputes the correct multiplier
or expansion. 0-7 = agrees with the loan officer's flawed number or cannot compute 1/0.25.
FRESH VARIANT: "A different loan officer says: 'Our reserve requirement is 5%, so using
1/(1-0.05) = 1.05, a new $4,000 deposit supports about $4,200 in new money supply.'
(a) Name the specific error. (b) Compute the correct multiplier and maximum expansion.
(c) Same as before — explain the money-vs-spending multiplier distinction in your own
words." ANSWER: (a) Same error — RR plugged into the spending-multiplier formula
1/(1-MPC) instead of the money-multiplier formula 1/RR. (b) Correct multiplier = 1/0.05 = 20.
Correct maximum expansion = 4,000 x 20 = $80,000 (not $4,200).

================= COMPLETION =================
After all four problems (and any re-attempts), produce EXACTLY:
    STUDENT'S SCORE: X/100
    WEEK 9 ASSIGNMENT — The Money Multiplier & Bank-Lending Problem Set
    Student: [name] | Date: ___
    Problem 1: a/25 — [one-line note]
    Problem 2: b/25 — [one-line note]
    Problem 3: c/25 — [one-line note]
    Problem 4: d/25 — [one-line note]
    Strongest skill: ___
    Worth another look: ___
Then say, verbatim: "Copy this entire report AND your share link to this chat, and submit both
in Canvas for this assignment." End with one genuine sentence of encouragement.

Instructor grading note + rubric (for Canvas)

Record the AI score (line 1); spot-check a sample against the chat share link. The embedded key makes scores consistent across chatbots. Summary rubric (each problem to 25, total 100):

Problem Skill (Objective 7) Full (per-problem)
1 The money multiplier: 1/RR, required vs. excess reserves, maximum expansion 25
2 Tracing the T-account through two loan rounds; explaining the geometric shrink 25
3 Functions of money; money vs. wealth; M1 vs. M2 classification (qualitative) 25
4 Applied reasoning: catching a money-multiplier-vs-spending-multiplier error (SLO A + B) 25

Quantitative gate: PASS — every number pre-computed/re-verified (see _build/logs/week-09-numbers.txt): P1 1/0.08=12.5, 800×0.08=64, 800−64=736, 800×12.5=10,000 (variant 1/0.16=6.25, 400×0.16=64, 400−64=336, 400×6.25=2,500); P2 2,000×0.10=200, 2,000−200=1,800, 1,800×0.10=180, 1,800−180=1,620 (variant 1,500×0.20=300, 1,500−300=1,200, 1,200×0.20=240, 1,200−240=960); P4 1/0.25=4, 5,000×4=20,000 (variant 1/0.05=20, 4,000×20=80,000).
Graph-logic/conceptual-canon check: PASS — every claim verified: banks lend the EXCESS reserves, never the required reserves and never the full deposit; the money multiplier is 1/RR, distinct from the spending multiplier 1/(1−MPC); money ≠ wealth (P3); M1 = cash + checking, M2 = M1 + savings/small time deposits (qualitative, no arithmetic asserted on real M1/M2 figures). No free numeric entry beyond the pre-vetted problems above; no essay item.

Canvas placement block

canvas_object    = Assignment
title            = "Week 9 Assignment — The Money Multiplier & Bank-Lending Problem Set (adaptive)"
assignment_group = "Assignments"
points_possible  = 100
grading_type     = points
submission_types = [online_text_entry, online_url]
due_offset_days  = 6
published        = true
submission_note  = "Paste the AI summary report (score on line 1) + the chat share link."
provenance       = "~ Prof. Ashford's edition · Fall 2026 · built with thecoursemaker.com"

~ Prof. Ashford's edition · Fall 2026 · built with thecoursemaker.com