Multiple Choice
Assume that the reserve requirement is 20% and the Federal Open Market Committee buys a $10,000 bond. The impact on the banking system is a(n)
A) injection of $10,000 in new reserves.
B) reduction of $50,000 in reserves.
C) injection of $50,000 in new reserves.
D) injection of $2,000 in new reserves.
Correct Answer:
Verified
Correct Answer:
Verified
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