If the Federal Reserve sells $1,000 in bonds and the required reserve ratio is 0.1 (assume banks hold no excess reserves)what will be the total change in reserves at all banks?

Question

Quizplus · Accepted Answer

When the Federal Reserve sells $1,000 in bonds, it decreases the reserves in the banking system by $1,000, as the money used to purchase the bonds is withdrawn from the banks.

If the Federal Reserve Sells $1,000 in Bonds and the Required