Suppose the Federal Reserve System has a required reserve ratio of 0.20.If the Open Market Committee sells $10 billion of securities to the commercial banking system,then before the money multiplier takes effect,initially excess reserves
A) Decrease by $10 billion.
B) Increase by $50 billion.
C) Increase by $10 million.
D) Decrease by $50 billion.
Correct Answer:
Verified
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