If the Fed buys $100 in securities and the reserve requirement is 10%, according to the simple formula for the money multiplier, the money supply

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When the Fed buys $100 in securities and the reserve requirement is 10%, the money multiplier is 1/(0.10) = 10. This means that for every dollar of reserves added to the banking system, the money supply can potentially increase by $10. Therefore, a $100 increase in reserves can increase the money supply by $100 * 10 = $1000.

If the Fed Buys $100 in Securities and the Reserve