Assume that the reserve requirement is 5 percent. All other things equal, will the money supply expand

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Assume that the reserve requirement is 5 percent. All other things equal, will the money supply expand more if the Federal Reserve buys $2,000 worth of bonds or if someone deposits in a bank $2,000 that he had been hiding in his cookie jar? If one creates more, how much more does it create? Support your thinking.

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Principles of economics

ISBN: 978-0538453042

6th Edition

Authors: N. Gregory Mankiw

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