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If the Required Reserve Ratio Is 100 Percent,could the Federal

question 67

Essay

If the required reserve ratio is 100 percent,could the Federal Reserve still change the money supply with open market operations? Explain whether they could or could not.


Definitions:

Contract

An enforceable pact by law that involves two or more individuals or groups.

Legal Capacity

The capability recognized by law for a person to act in a particular role or enter into a contract, often related to age and mental soundness.

Express Authority

The power granted to an agent or representative explicitly stated by the principal in a written or oral form.

Actual Authority

The express and implied powers given by a principal to an agent for carrying out specific transactions.

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