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Economics Which set of actions implies that the government will raise the money supply, as measured by M1 or M2, by $100? The Fed raises the reserve requirement at small banks from 5 percent to 10 percent. Outstanding bank loans remain at $100. O The Fed reduces the discount window rate that it lends at from 5 percent to 4 percent, and discount window loans remain unchanged at $100. O The Fed shuts down a bank that has deposits and assets both exactly equal to $100 (and bank equity equal to zero). One branch of the government sells a treasury bill for $100 in order to pay for vaccine supplies, and the Fed purchases that $100 treasury bill with $100 in bank reserves. O The Fed sells a $100 treasury bill to a private bank for $100 in reserves.

Economics Which set of actions implies that the government will raise the money supply, as measured by M1 or M2, by $100? The Fed raises the reserve requirement at small banks from 5 percent to 10 percent. Outstanding bank loans remain at $100. O The Fed reduces the discount window rate that it lends at from 5 percent to 4 percent, and discount window loans remain unchanged at $100. O The Fed shuts down a bank that has deposits and assets both exactly equal to $100 (and bank equity equal to zero). One branch of the government sells a treasury bill for $100 in order to pay for vaccine supplies, and the Fed purchases that $100 treasury bill with $100 in bank reserves. O The Fed sells a $100 treasury bill to a private bank for $100 in reserves.

Exploring Economics
Exploring Economics
8th Edition
ISBN:9781544336329
Author:Robert L. Sexton
Publisher:Robert L. Sexton
Chapter25: Money, Banking, And The Federal Reserve System
Section: Chapter Questions
Problem 24P
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Economics Which set of actions implies that the government will raise the money supply, as measured by M1 or M2, by $100? The Fed raises the reserve requirement at small banks from 5 percent to 10 percent. Outstanding bank loans remain at $100. O The Fed reduces the discount window rate that it lends at from 5 percent to 4 percent, and discount window loans remain unchanged at $100. O The Fed shuts down a bank that has deposits and assets both exactly equal to $100 (and bank equity equal to zero). One branch of the government sells a treasury bill for $100 in order to pay for vaccine supplies, and the Fed purchases that $100 treasury bill with $100 in bank reserves. The Fed sells a $100 treasury bill to a private bank for $100 in reserves.
Transcribed Image Text:Economics Which set of actions implies that the government will raise the money supply, as measured by M1 or M2, by $100? The Fed raises the reserve requirement at small banks from 5 percent to 10 percent. Outstanding bank loans remain at $100. O The Fed reduces the discount window rate that it lends at from 5 percent to 4 percent, and discount window loans remain unchanged at $100. O The Fed shuts down a bank that has deposits and assets both exactly equal to $100 (and bank equity equal to zero). One branch of the government sells a treasury bill for $100 in order to pay for vaccine supplies, and the Fed purchases that $100 treasury bill with $100 in bank reserves. The Fed sells a $100 treasury bill to a private bank for $100 in reserves.
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