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MMLU-Pro / 6861 / What is the potential impact on the money supply of an open market sale by the…

Problem

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question

What is the potential impact on the money supply of an open market sale by the FED of $3,000,000 in government bonds, assuming all commercial banks are fully "loaned up" (i.e., their excess reserves are zero), and the re-quired reserve ratio is 25%?

category

economics

options

  1. $6,000,000 reduction
  2. $12,000,000 reduction
  3. $20,000,000 reduction
  4. $3,000,000 increase
  5. $8,000,000 reduction
  6. $15,000,000 reduction
  7. No impact on the money supply
  8. $3,000,000 reduction
  9. $24,000,000 reduction
  10. $9,000,000 reduction

src

stemez-Economics

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