During the financial crisis, banks excess reserves [beyond what is required by regulatory reserve requirements] exploded. If the Federal Reserve Bank of New York purchased $1 billion in U.S. Treasury Bills in this environment and the reserve requirement is 20%, then the change in the total money supply will be approximately: Group of answer choices an increase of a bit
During the financial crisis, banks excess reserves [beyond what is required by regulatory reserve requirements] exploded. If the Federal Reserve Bank of New York purchased $1 billion in U.S. Treasury Bills in this environment and the reserve requirement is 20%, then the change in the total money supply will be approximately: Group of answer choices an increase of a bit
Chapter13: Monetary Policy
Section: Chapter Questions
Problem 8E
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During the financial crisis, banks excess reserves [beyond what is required by regulatory reserve requirements] exploded. If the Federal Reserve Bank of New York purchased $1 billion in U.S. Treasury Bills in this environment and the reserve requirement is 20%, then the change in the total money supply will be approximately:
Group of answer choices
an increase of a bit more than $1 billion.
a decrease of a bit more than $1 billion.
an increase of a bit less than $5 billion.
a decrease of a bit less than $5 billion
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