Suppose the Fed sells 100 million of U.S. securities to the security dealers. If the reserve requirement is 20 percent, the currency holdings of the public are unchanged, and banks have zero excess reserves both before and after the transaction, the total impact on the money supply will be a:
a. 100 million decrease. b. 500 million increase.
c. 500 million decrease. d. 100 million increase.
Question 2
In general, GDP per capita is not highly correlated with alternative measures of quality of life.
a. True
b. False
Indicate whether the statement is true or false
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