If the required reserve ratio is 25 percent and banks do not hold excess reserves, when the Federal Reserve sells $40 million of bonds to the public, the money supply eventually: decreases by $40 million. increases by $40 million. increases by $160 million. decreases by $160 million.
If the required reserve ratio is 25 percent and banks do not hold excess reserves, when the Federal Reserve sells $40 million of bonds to the public, the money supply eventually: decreases by $40 million. increases by $40 million. increases by $160 million. decreases by $160 million.
Chapter1: Making Economics Decisions
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Reserve sells $40 million of bonds to the public, the money supply eventually: decreases by $40 million.
increases by $40 million. increases by $160 million. decreases by $160 million."
Transcribed Image Text:If the required reserve ratio is 25 percent and banks do not hold excess reserves, when the Federal
Reserve sells $40 million of bonds to the public, the money supply eventually: decreases by $40 million.
increases by $40 million. increases by $160 million. decreases by $160 million.
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