Business, 17.04.2020 01:29 EssenceBlocker144

The banking system currently has $50 billion of reserves, none of which are excess. People hold only deposits and no currency, and the reserve requirement is 10 percent. lf the Fed raises the reserve requirement to 12.5 percent and at the same time sells $125 billion worth of bonds, then by how much does he money sup change?

a None of the above is correct.

b. It falls by $20 billion

c. It falls by $110 billion

d. It falls by $180 billion.

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The banking system currently has $50 billion of reserves, none of which are excess. People hold only...

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