The Fed buys $50,000 of government securities.The desired reserve ratio is 10 percent and the currency drain is zero.What will be the change in the quantity of money?
A) $5,000
B) $50,000
C) $500,000
D) $5,000,000
E) $0
Correct Answer:
Verified
Q242: A currency drain is
A)an increase in currency
Q244: A-1 bank initially has no excess reserves.If
Q249: The money multiplier is the
A)fraction of the
Q250: If the currency drain is 30 percent
Q251: If the money multiplier is 3.0,a $1,000
Q251: The Fed buys $25,000 of government securities.The
Q254: The currency drain reduces the amount of
A)reserves
Q256: The number by which a change in
Q259: If the currency drain is 0.2 and
Q260: Suppose the currency drain is 25 percent
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