The trading desk at the Federal Reserve sold $100,000,000 in T-bills to the public. a) If the current reserve requirement is 8.0%, how much could the money supply change? b) If banks actually hold 10% in reserves and individuals hold 10% of deposits in cash. What is the actual impact on money supply?

The trading desk at the Federal Reserve sold $100,000,000 in T-bills to the public. a) If the current reserve requirement is 8.0%, how much could the money supply change? b) If banks actually hold 10% in reserves and individuals hold 10% of deposits in cash. What is the actual impact on money supply?

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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I need both a ) and b)answers i will give upvotes no chatgpt

The trading desk at the Federal
Reserve sold $100,000,000 in T-bills to
the public.
a) If the current reserve requirement is
8.0%, how much could the money
supply change?
b) If banks actually hold 10% in
reserves and individuals hold 10% of
deposits in cash. What is the actual
impact on money supply?

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Suppose the Federal Reserve increased deposits by $100 billion, but the reserve requirementon all deposits was 100%. What impact would the change in deposits have on the moneysupply? Group of answer choices The money supply would increase by $100 billion. The money supply would increase by an infinite amount. The money supply would decrease by $100 billion. The money supply would decrease by an infinite amount. The money supply would not change.
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Manshukh
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