Question: 6. In a simplifi ed banking system in which all banks are subject to a 20 percent required reserve ratio, a $1,000 open market purchase

6. In a simplifi ed banking system in which all banks are subject to a 20 percent required reserve ratio, a $1,000 open market purchase by the Fed would cause the money supply to

a. increase by $100.

b. decrease by $200.

c. decrease by $5,000.

d. increase by $5,000.

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