In the simple deposit expansion model, an expansion in checkable deposits of $1,000 when the required reserve ratio is equal to 20 percent implies that the Fed O A. sold $500 in government bonds. OB. purchased $200 in government bonds ⒸC. sold $200 in government bonds. OD. purchased $500 in government bonds. A

ECON MACRO
5th Edition
ISBN:9781337000529
Author:William A. McEachern
Publisher:William A. McEachern
Chapter14: Banking And The Money Supply
Section: Chapter Questions
Problem 2.3P
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In the simple deposit expansion model, an expansion in checkable deposits of $1,000 when the required reserve ratio is equal to 20
percent implies that the Fed
O A. sold $500 in government bonds
B. purchased $200 in government bonds
C. sold $200 in government bonds.
D. purchased $500 in government bonds,
Transcribed Image Text:In the simple deposit expansion model, an expansion in checkable deposits of $1,000 when the required reserve ratio is equal to 20 percent implies that the Fed O A. sold $500 in government bonds B. purchased $200 in government bonds C. sold $200 in government bonds. D. purchased $500 in government bonds,
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