3 A. 3. The lending ability of commercial banks increases when the Reserve ratio is raised...

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3 A. 3. The lending ability of commercial banks increases when the Reserve ratio is raised Treasury collects tax revenues Fed sells securities in the open market Fed buys securities in the open market If the Fed buys government securities from commercial banks in the open market: The Fed gives the securities to the commercial banks and increases the banks' reserves The Fed gives the securities to the commercial banks decreases the banks' reserves Commercial banks give the securities to the Fed, and the Fed increases the banks' reserves Commercial banks give the securities to the Fed, and the Fed decreases the banks' reserve Assume that there is a 25 percent reserve ratio and that the Federal Reserve buys $4 b th of government securities. If the securities are purchased from the non-bank public, this potential to increase money supply by a maximum of: $16 billion, but only by $14 billion if the securities are purchased directly from comme $14 billion, but by $16 billion if the securities are purchased directly from commercia $16 billion if the securities are purchased directly from comm from commerc 3 A. 3. The lending ability of commercial banks increases when the Reserve ratio is raised Treasury collects tax revenues Fed sells securities in the open market Fed buys securities in the open market If the Fed buys government securities from commercial banks in the open market: The Fed gives the securities to the commercial banks and increases the banks' reserves The Fed gives the securities to the commercial banks decreases the banks' reserves Commercial banks give the securities to the Fed, and the Fed increases the banks' reserves Commercial banks give the securities to the Fed, and the Fed decreases the banks' reserve Assume that there is a 25 percent reserve ratio and that the Federal Reserve buys $4 b th of government securities. If the securities are purchased from the non-bank public, this potential to increase money supply by a maximum of: $16 billion, but only by $14 billion if the securities are purchased directly from comme $14 billion, but by $16 billion if the securities are purchased directly from commercia $16 billion if the securities are purchased directly from comm from commerc

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solution 1 Ans The lending opportunity of commercial banks increases when the d Fed buys secur... View the full answer