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Suppose the money supply is currently $500 billion and the Fed 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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Vaishnavi Kanukurti
Vaishnavi KanukurtiLv10
28 Sep 2019

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