-Based on the Above Table, an Open Market Operation in Which

Multiple Choice

-Based on the above table, an open market operation in which the Fed purchased $200,000 of government securities would

A) create a reserve deficiency for the banking system.
B) lead to a maximum potential expansion of the money supply of $200,000.
C) lead to a maximum potential expansion of the money supply of $2 million.
D) cause demand deposits to fall by $200,000.