In the Simple Deposit Expansion Model,a Decline in Checkable Deposits

question 125

Multiple Choice

In the simple deposit expansion model,a decline in checkable deposits of $500 when the required reserve ratio is equal to 20 percent implies that the Fed

• A)sold $250 in government bonds.
• B)sold $100 in government bonds.
• C)sold $50 in government bonds.
• D)purchased $100 in government bonds.

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Definitions:

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