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
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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?
Transcribed Image Text: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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