The reserve ratio is 10 percent, banks do not hold excess reserves, and people hold only deposits and no currency. When the Fed sells $20 million worth of bonds to the public, bank reserves
a. increase by $20 million and the money supply eventually increases by $20 million.
b. increase by $20 million and the money supply eventually increases by $200 million.
c. decrease by $2 million and the money supply eventually increases by $20 million.
d. decrease by $20 million and the money supply eventually decreases by $200 million.
d
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Economic models are rarely constructed using
A. equations. B. words. C. graphs. D. physical objects.
Refer to Table 7-5. Fill in the following table with the opportunity costs of producing bows and arrows for Tran and Farah
Pens Pencils Tran Farah
If a bank's reserves are exactly equal to the required amount of reserves, then it has no excess reserves
a. True b. False Indicate whether the statement is true or false
Generally, most economists feel that a sales tax is:
a. regressive. b. proportional. c. progressive. d. fair.