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Scenario 13.2 Assume the following conditions hold. Now the Federal Reserve engages in an open market operation by purchasing $1 billion worth of government bonds from private bond dealers, who then deposit the $1 billion in the banks.This acts to lower the equilibrium interest rate by 2 percent.
Refer to Scenario 13.1.What is the ultimate change in the money supply following the open market operation by the Fed?
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