Suppose the required reserve ratio is 10 percent and the Fed buys bonds for $2 million....

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Suppose the required reserve ratio is 10 percent and the Fed buys bonds for $2 million. The bond dealer deposits the check into a commercial bank, and the check clears. The net result of this transaction is: A. an increase of reserves in the bank of $2 million without a decrease of reserves elsewhere. B. an increase of reserves in the bank of $1.84 million without a decrease of reserves elsewhere. C. an increase of reserves in the bank of $2 million and a decrease of reserves in another bank of $2 million, so that there is no change in the money supply. D. an increase of reserves in the bank of $0.16 million without a decrease of reserves elsewhere. Suppose the required reserve ratio is 10 percent and the Fed buys bonds for $2 million. The bond dealer deposits the check into a commercial bank, and the check clears. The net result of this transaction is: A. an increase of reserves in the bank of $2 million without a decrease of reserves elsewhere. B. an increase of reserves in the bank of $1.84 million without a decrease of reserves elsewhere. C. an increase of reserves in the bank of $2 million and a decrease of reserves in another bank of $2 million, so that there is no change in the money supply. D. an increase of reserves in the bank of $0.16 million without a decrease of reserves elsewhere.

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