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The Fed Conducts an Open-Market Purchase of Treasury Bills of $10

Question 131

Multiple Choice

The Fed conducts an open-market purchase of Treasury bills of $10 million.If the required reserve ratio is 0.10, what change in the money supply can be expected using the oversimplified money multiplier?


A) $100 million
B) $10 million
C) 0
D) −$10 million
E) −$100 million

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