Exam 9: The Nature and Creation of Money

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Suppose a bank has $10,000 in deposits and $1,000 in reserves. The required reserve ratio is 5%. Which of the following occurs if the required reserve ratio is increased to 10%?

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A bank that has no excess reserves

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If the reserve ratio is 10%, and banks do not hold excess reserves, when the Fed purchases $10 million of government bonds, bank reserves

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The Federal Reserve System was established in 1913 in response to the

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