Suppose That the Fed Undertakes an Open Market Purchase of $15

question 168

Multiple Choice

Suppose that the Fed undertakes an open market purchase of $15 million worth of securities from a bank.If the required reserve ratio is 12%,what is the resulting change in checkable deposits (or the money supply) ,assuming that there are no cash leakages and that banks hold zero excess reserves?

• A) $180 million
• B) $12.5 million
• C) $18 million
• D) $125 million

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Freedoms

The powers or rights to act, speak, or think as one wants without hindrance or restraint.

Legal System

The framework of rules, courts, and processes established by a government to administer justice and resolve legal disputes.

Equity

The concept of fairness and justice in the legal system, often leading to remedies not provided by common law.

Fairness

The state of being impartial, just, and equitable in decisions or actions.