Discussion Post: Macroeconomics
Money Supply and fractional reserve banking
Assume that the reserve requirement is 8 percent. All other things equal, will the money supply expand more if the Federal Reserve buys $4 billion worth of bonds or if someone deposits in a bank $4 billion that they had been hiding in their cookie jar? If one creates more, how much more does it create? Support your thinking.
The response must include a reference list. Using Times New Roman 12 pnt font, double-space, one-inch margins, and APA style of writing and citations.