Assume that the reserve requirement is 5 percent. All other things being equal, will the money supply
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Assume that the reserve requirement is 5 percent. All other things being equal, will the money supply expand more if the Fed buys $2,000 worth of bonds or if someone deposits in a bank $2,000 that she had been hiding in her cookie jar? If one creates more, how much more does it create? Support your thinking.
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The money supply will expand more if someone deposits 2000 in a bank rather than if the Fed buys 200...View the full answer
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