Suppose the fed purchases 1000 worth of treasury bonds


Suppose the Fed purchases $1,000 worth of Treasury bonds. Suppose also that the required reserve ratio is 10%. How much money will be created in the banking system?

Exactly $1,000

Less than $1,000 for sure

At most $1,000

More than $1,000.

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Business Economics: Suppose the fed purchases 1000 worth of treasury bonds
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