Multiple Choice
Assume that there is no leakage from the banking system and that all banks are lending their maximum amount. The liquidity ratio is 20%. If the Bank of England sells £10 million worth of government securities to the public, the change in the money supply will be
A) £50 million.
B) - £20 million.
C) - £50 million.
D) £20 million.
Correct Answer:
Verified
Correct Answer:
Verified
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