If the reserve requirement is 10 percent, which of the following pairs of changes would both allow a bank to lend out an additional $10,000?
A)The Fed buys a $10,000 bond from the bank or someone deposits $10,000 in the bank.
B)The Fed buys a $10,000 bond from the bank or the Fed lends the bank $10,000.
C)The Fed sells a $10,000 bond to the bank or someone deposits $10,000 in the bank.
D)The Fed sells a $10,000 bond to the bank or the Fed lends the bank $10,000.

Question

Quizplus · Accepted Answer

When the Fed buys a $10,000 bond from the bank or lends the bank $10,000, it increases the bank's reserves, allowing it to lend out more money.

If the Reserve Requirement Is 10 Percent, Which of the Following