Multiple Choice
Assume there is no leakage from the banking system and that all commercial banks are loaned up. The required reserve ratio is 12.5%. If the Fed buys $20 million worth of government securities from the public, the change in the money supply will be
A) $20 million.
B) $125 million.
C) $160 million.
D) $250 million.
Correct Answer:
Verified
Correct Answer:
Verified
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