When the Reserve Bank sells government securities, the banks' Group of answer choices reserve requirements will increase and lending will contract, causing a decrease in the money supply. reserves will decrease and lending will contract, causing a decrease in the money supply. reserves will increase and lending will expand, causing an increase in the money supply. reserves/deposit ratio will increase and lending will expand, causing an increase in the money supply. reserves will increase and lending will contract, causing no change in the money supply.
When the Reserve Bank sells government securities, the banks' Group of answer choices reserve requirements will increase and lending will contract, causing a decrease in the money supply. reserves will decrease and lending will contract, causing a decrease in the money supply. reserves will increase and lending will expand, causing an increase in the money supply. reserves/deposit ratio will increase and lending will expand, causing an increase in the money supply. reserves will increase and lending will contract, causing no change in the money supply.
Chapter25: Money Creation
Section: Chapter Questions
Problem 9SQ
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Question
When the Reserve Bank sells government securities, the banks'
Group of answer choices
reserve requirements will increase and lending will contract, causing a decrease in the money supply.
reserves will decrease and lending will contract, causing a decrease in the money supply.
reserves will increase and lending will expand, causing an increase in the money supply.
reserves/deposit ratio will increase and lending will expand, causing an increase in the money supply.
reserves will increase and lending will contract, causing no change in the money supply.
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