Assume that the reserve requirement is 25 percent. If the Federal Reserve buys $2,500 worth of bonds, the largest possible increase in the money supply is . If someone deposits in a bank $2,500 that she had been hiding in her cookie jar, the largest possible increase in the money supply is . True or False: All other things equal, the money supply will expand more if the Federal Reserve buys $2,500 worth of bonds than if someone deposits in a bank $2,500 that she had been hiding in her cookie jar. True False
Assume that the reserve requirement is 25 percent. If the Federal Reserve buys $2,500 worth of bonds, the largest possible increase in the money supply is . If someone deposits in a bank $2,500 that she had been hiding in her cookie jar, the largest possible increase in the money supply is . True or False: All other things equal, the money supply will expand more if the Federal Reserve buys $2,500 worth of bonds than if someone deposits in a bank $2,500 that she had been hiding in her cookie jar. True False
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Assume that the reserve requirement is 25 percent.
If the Federal Reserve buys $2,500 worth of bonds, the largest possible increase in the money supply is
.
If someone deposits in a bank $2,500 that she had been hiding in her cookie jar, the largest possible increase in the money supply is
.
True or False: All other things equal, the money supply will expand more if the Federal Reserve buys $2,500 worth of bonds than if someone deposits in a bank $2,500 that she had been hiding in her cookie jar.
True
False
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