The Fed buys $25,000 of government securities.The desired reserve ratio is 20 percent and the currency drain is zero.What will be the change in the quantity of money?
A) $5,000
B) $20,000
C) $25,000
D) $125,000
E) $50,000
Correct Answer:
Verified
Q244: A-1 bank initially has no excess reserves.If
Q246: C is the currency drain and
Q248: The Fed purchases $1 million of U.S.government
Q249: Suppose the Federal Reserve buys $50 million
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
Q254: The currency drain reduces the amount of
A)reserves
Q255: The Fed buys $50,000 of government securities.The
Q279: The monetary multiplier is 3 and the
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