Multiple Choice
If the FOMC purchases government bonds priced at $5, 000 from a bond dealer who banks at National Bank, and if the reserve requirement is 20 percent, then the required reserves of National Bank:
A) increase by $5, 000.
B) increase by $4, 000.
C) increase by $1, 000.
D) decrease by $5, 000.
E) decrease by $1, 000.
Correct Answer:
Verified
Correct Answer:
Verified
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