Multiple Choice
Suppose that the Fed undertakes an open market sale,selling $3 million worth of securities to a bank.If the required reserve ratio is 11%,checkable deposits (or the money supply) ,would _______________ by ________________ million,assuming that there are no cash leakages and that banks hold zero excess reserves.
A) rise; $27
B) decline; $33
C) decline; $27
D) rise; $33
Correct Answer:
Verified
Correct Answer:
Verified
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