Under a reverse repurchase, the BSP act as the seller of government securities, thus, the bank's payment reduces its reserve account resulting to: Expansion in the system's money supply Contraction in the system's money supply Expansion in the system's money demand Contraction in the system's money demand
Under a reverse repurchase, the BSP act as the seller of government securities, thus, the bank's payment reduces its reserve account resulting to: Expansion in the system's money supply Contraction in the system's money supply Expansion in the system's money demand Contraction in the system's money demand
Chapter25: Money Creation
Section: Chapter Questions
Problem 10SQ
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Question
Under a reverse repurchase, the BSP act as the seller of government securities, thus, the bank's payment reduces its reserve account resulting to:
-
Expansion in the system's money supply
-
Contraction in the system's money supply
-
Expansion in the system's money demand
-
Contraction in the system's money demand
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