The Fed buys 25,000 of government securities. The desired reserve ...

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The Fed buys 25,000 of government securities. The desired reserve ratio is 20 percent and the currency drain ratio is zero. What will be the change in the quantity of money?
 
  A) 5,000
  B) 20,000
  C) 25,000
  D) 125,000
  E) 50,000

Question 2

Which of the following could result in a recession?
 
  A) a rise in the price of oil
  B) an increase in investment
  C) a tax cut
  D) an increase in the quantity of money
  E) an increase in government expenditures on goods and services

[katara]

Answer to Question 1

D

Answer to Question 2

A

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Thank you

[katara]

No problemo