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Author Question: The Federal Reserves Tools of Monetary ControlAssume there is no leakage from the banking system and ... (Read 14 times)

Ethanolson3

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Question 1

The Federal Reserves Tools of Monetary Control

If a bank receives a $10 million discount loan from the Federal Reserve, then the bank's reserves will initially ________.
◦ increase by less than $10 million
◦ increase by $10 million
◦ not change
◦ increase by more than $10 million

Question 2

The Federal Reserves Tools of Monetary Control

Assume there is no leakage from the banking system and that all commercial banks are loaned up. The required reserve ratio is 18%. If the Fed sells $15 billion worth of government securities to the public, then the change in the money supply will be ________. (Round to the nearest hundredth when appropriate.)
◦ -$18 billion
◦ -$27 billion
◦ -$2.55 billion
◦ -$83.33 billion


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Marked as best answer by Ethanolson3 on Nov 23, 2022

marufp

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Ethanolson3

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Reply 2 on: Nov 23, 2022
:D TYSM


alexanderhamilton

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Reply 3 on: Yesterday
YES! Correct, THANKS for helping me on my review

 

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