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What is the total potential change in the money supply as a result of the Feds action if reserve requirements are 20 percent? Suppose the Fed purchases a $1,000 government bond from you. You deposit the entire $1,000 in your bank.



A. $1,000
B. $4,000
C. $5,000
D. $0

This question is part of Macroeconomics [Ch 1
Asked by Coulter, Last updated: May 24, 2020

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1 Answer

John Smith

John Smith

Answered Mar 15, 2017

$5,000
 

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