True or False. Assume that the reserve requirement ratio is 8.5 percent and that the...
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True or False. Assume that the reserve requirement ratio is 8.5 percent and that the Fed uses open market operations by buying $438.5 million worth of Treasury securities. Assuming that banks use all funds except required reserves to make loans and that the public does not store any cash, the money supply should increase by about 200 billon. Provide at least five sentences of Explanation or calculation to support your answer.
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