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Suppose the Federal Reserve (Fed) decides the current money supply of $ 2.1 $2.1 trillion is too low, and that an increase of $ 400 400 billion is necessary. What tool can the Fed use to accomplish this increase? Assume the current reserve ratio is 0.1 0.1 . Sell government securities. Buy government securities. Increase the interest paid on bank reserves. Increase the reserve ratio. Calculate the change in reserves necessary to achieve the $ 400 400 billion increase. $ billion
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Suppose the Federal Reserve (Fed) decides the current money supply of $ 2.1 $2.1 trillion is too low...
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