Assume the reserve ratio is 25% and the Federal Reserve Banks buy $4 million of U.S....

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Assume the reserve ratio is 25% and the Federal Reserve Banks buy $4 million of U.S. securities from the public, which then deposits this amount into checking accounts. As a result of these transactions, the supply of money is: a. Not directly affected, but the money-creating potential of the commercial banking system is increased by $12 million b. Directly increased by $4 million and the money-creating potential of the commercial banking system is increased by an additional $16 million Directly reduced by $4 million and the money-creating potential of the commercial banking system is decreased by an additional $12 million c. d. Directly increased by $4 million and the money-creating potential of the commercial banking system is increased by an additional $12 million Assume the reserve ratio is 25% and the Federal Reserve Banks buy $4 million of U.S. securities from the public, which then deposits this amount into checking accounts. As a result of these transactions, the supply of money is: a. Not directly affected, but the money-creating potential of the commercial banking system is increased by $12 million b. Directly increased by $4 million and the money-creating potential of the commercial banking system is increased by an additional $16 million Directly reduced by $4 million and the money-creating potential of the commercial banking system is decreased by an additional $12 million c. d. Directly increased by $4 million and the money-creating potential of the commercial banking system is increased by an additional $12 million

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