Ask Question
28 May, 01:07

Assume that the banking system is loaned up and that any open-market purchase by the Fed directly increases reserves in the banks. If the required reserve ratio is 0.2, by how much could the money supply expand if the Fed purchased $2 billion worth of bonds?

+2
Answers (1)
  1. 28 May, 01:58
    0
    Money Supply Would Expand by = 2 billion / 0.2 = $10 billion.
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “Assume that the banking system is loaned up and that any open-market purchase by the Fed directly increases reserves in the banks. If the ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers