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April 24, 2014

Homework Help: macro

Posted by Teresa on Sunday, October 15, 2006 at 10:21am.

what would happen to the money supply if the federal reserve made an open market sale of 5 million worth of gov't securities to a private citizen? assume that the bank with which this private citizen does business with is all loaned up, has reserves of 20 million dollars, deposits of 100 million dollars and must follow a required reserve policy of 20%

A "Bernadette" posted (almost) this same question on Sunday, Oct 15. See my response.

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