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Problem

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question

Suppose the FED buys $100,000 of government bonds from a commercial bank. What will be the effect of this purchase on the money supply, if the re-quired reserve ratio is 10%, if banks maintain no excess reserves, and if there is no change in the public's currency holdings?

category

economics

options

  1. $81,000
  2. $720,000
  3. $1,100,000
  4. $250,000
  5. $90,000
  6. $900,000
  7. $1,000,000
  8. $100,000
  9. $500,000
  10. $110,000

src

stemez-Economics

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