Suppose the money supply is currently 500 billion and


Suppose the money supply is currently $500 billion and theFed wishes to increase it by $100 billion.

a. Given a required reserve ratio of 0.25, what should it do?
b. If it decided to change the money supply by changing the required reserve ratio, what change should it make?

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Econometrics: Suppose the money supply is currently 500 billion and
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