The desired reserve ratio is 10 percent,Bank A has $1 million in excess reserves,and all other banks have zero excess reserves.If the Bank of Canada buys $1 million of government securities and the cheque is deposited in Bank A,but Bank A refuses to grant any loans or buy any financial securities,then
A) the money supply does not increase.
B) the money supply increases by $900,000.
C) the money supply increases by $1 million.
D) the money supply increases by more than $1 million.
Correct Answer:
Verified
Q24: When the Bank of Canada buys a
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Q27: When the Bank of Canada buys Canadian
Q28: To decrease the money supply
A)the Bank of
Q30: Currently there are zero excess reserves in
Q31: The Bank of Canada buys $1 million
Q32: The desired reserve ratio is 10%,and originally
Q33: If the Bank of Canada sells $100
Q34: The transactions demand for money
A)varies inversely with
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