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Business, 30.07.2020 02:01 yedida

Suppose the Fed sells $25,000 in bonds to Luna Corporation. Luna pays for the bonds with a check drawn on Fifth Third Bank, which the Fed deposits. Which of the following happen when Fifth Third Bank pays the check? A. Fifth Third Bank's reserves in the Fed are decreased by $25,000.
B. Reserves in the entire banking system are decreased by $25,000.

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Suppose the Fed sells $25,000 in bonds to Luna Corporation. Luna pays for the bonds with a check dra...
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