halledoll2002
21.11.2019 •
Business
Assume that the reserve requirement is 20 percent. also assume that banks do not hold excess reserves and there is no cash held by the public. the federal reserve decides that it wants to expand the money supply by $ 40 million dollars.
a. if the fed is using open? market operations, will it buy or sell bonds?
b. what quantity of bonds does the fed need to buy or sell to accomplish the goal? explain your reasoning.
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