Let the reserve requirement be 15 percent for deposits. Assume there are not excess reserves. If the currency demand equals 40 percent of deposits and total reserves equal $60 billion, then an open markey sale of $1.5 billion in government bonds should Reduce the money supply from $160 billion to $156 billion Increase the money supply from $400 billiion to $410 billion Reducce the money supply from $400 billion to $390 bilion Reduce the money supply from $560 billion to $546 billion
Let the reserve requirement be 15 percent for deposits. Assume there are not excess reserves. If the currency demand equals 40 percent of deposits and total reserves equal $60 billion, then an open markey sale of $1.5 billion in government bonds should Reduce the money supply from $160 billion to $156 billion Increase the money supply from $400 billiion to $410 billion Reducce the money supply from $400 billion to $390 bilion Reduce the money supply from $560 billion to $546 billion
Chapter13: Monetary Policy
Section: Chapter Questions
Problem 8E
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Let the reserve requirement be 15 percent for deposits. Assume there are not
Reduce the money supply from $160 billion to $156 billion
Increase the money supply from $400 billiion to $410 billion
Reducce the money supply from $400 billion to $390 bilion
Reduce the money supply from $560 billion to $546 billion
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