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Business, 12.02.2021 01:00 slippedsumo

Suppose the Fed executes open market purchases of government bonds in the amount of $125 billion. Before this transaction, all banks satisfied their reserve requirements and held no excess reserves. The required reserve ratio is 10%. Assume that people do not hold any currency, there are zero excess reserves, and that the $125B was initially deposited into a single bank. What level of reserves will the bank need to keep

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Suppose the Fed executes open market purchases of government bonds in the amount of $125 billion. Be...
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