Multiple Choice
If the Fed buys $10 million of government securities when the desired reserve ratio is 20 percent and the currency drain ratio is 5 percent,the quantity of money
A) increases by $42 million.
B) increases by $50 million.
C) decreases by $42 million.
D) decreases by $50 million.
E) increases by $7.5 million.
Correct Answer:
Verified
Correct Answer:
Verified
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