Refer to Exhibit 13-1

question 41

Multiple Choice

Refer to Exhibit 13-1.Suppose that the Federal Reserve conducts open market operations by purchasing $1,000 worth of government securities from Bank A.At the end of this process of money creation,what equation would be used to determine the total amount of new checkable deposits?

• A) simple deposit multiplier x change in reserves resulting from the initial injection of funds
• B) 1/r x change in reserves resulting from the initial injection of funds
• C) r x change in reserves resulting from the initial injection of funds
• D) 1/r
• E) a or b

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