If the Federal Reserve Sells $1,000 in Bonds and the Required

question 90

Multiple Choice

If the Federal Reserve sells $1,000 in bonds and the required reserve ratio is 0.1 (assume banks hold no excess reserves) what will be the total change in reserves at all banks?

• A) $10,000
• B) $1,000
• C) -$10,000
• D) -$1,000
• E) -$1,100

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