A commercial bank sells a $10,000 government bond to a securities dealer. The dealer pays for the bond in cash, which the bank adds to its vault cash. The money supply has:
A) Decreased by $10,000 multiplied by the reciprocal of the required reserve ratio
B) Decreased by $10,000
C) Increased by $10,000
D) Not been affected
Correct Answer:
Verified
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