Problem
When the Fed adds new reserves to the system, some of these new reserves find their way out of the country into foreign banks or foreign investment funds. In addition, some portion of the new reserves ends up in people's pockets and mattresses instead of bank vaults. These "leakages" reduce the money multiplier and sometimes make it very difficult for the Fed to control the money supply precisely. Explain why this is true.
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.