The Fed purchases $1 million of U.S.government securities from First Bank.The desired reserve ratio is 10 percent,the currency drain ratio is zero,and banks loan all excess reserves.The Fed's purchase increases First Bank's excess reserves by how much?
A) $900,000
B) $1,000,000
C) $1,100,000
D) $10,000,000
E) $100,000
Correct Answer:
Verified
Q248: When a bank receives $100,000 in new
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A)fraction of the
Q250: If a single bank has $25,000 in
Q251: If the money multiplier is 3.0,a $1,000
Q252: C/D is the currency drain ratio and
Q254: The currency drain reduces the amount of
A)reserves
Q255: Assume First Central Bank has a desired
Q256: The number by which a change in
Q257: A currency drain _ the amount of
Q258: A currency drain occurs when the
A)Fed increases
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