Question: 2. How is money supply growth affected by a decrease in the reserve requirement ratio? Assume that the reserve requirements ratio is 4%. How much

2. How is money supply growth affected by a decrease in the reserve requirement ratio? Assume that the reserve requirements ratio is 4%. How much the money supply will increase after the injection of $120 million?

3. Do you think that large financial institutions should have been rescued by the Fed during the Sub-Prime crisis?

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