Suppose the reserve ratio is 10 percent and banks do not hold excess reserves.Under these circumstances,suppose the Bank of Canada sells $60 million of bonds to the public.Which statement best describes the effects of this open-market operation?
A) Bank reserves increase by $60 million,and the money supply eventually increases by $600 million.
B) Bank reserves increase by $60 million,and the money supply eventually increases by $800 million.
C) Bank reserves decrease by $60 million,and the money supply eventually decreases by $600 million.
D) Bank reserves decrease by $60 million,and the money supply eventually decreases by $800 million.

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The Answer of Suppose the reserve ratio is 10 percent and banks do not hold excess reserves.Under these circumstances,suppose the Bank of Canada sells $60 million of bonds to the public.Which statement best describes the effects of this open-market operation?
A) Bank reserves increase by $60 million,and the money supply eventually increases by $600 million.
B) Bank reserves increase by $60 million,and the money supply eventually increases by $800 million.
C) Bank reserves decrease by $60 million,and the money supply eventually decreases by $600 million.
D) Bank reserves decrease by $60 million,and the money supply eventually decreases by $800 million.

Suppose the Reserve Ratio Is 10 Percent and Banks Do