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Engineering, 16.08.2021 06:30 kiki8734

Suppose the Federal Reserve decided to purchase $40 billion worth of government securities in the open market. a. By how much will M1 change initially if the entire $40 billion is deposited into transactions accounts?
2
points
M1 will initially
[by:
billion
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b. How will the lending capacity of the banking system be affected if the reserve requirement is 10 percent?
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Total lending capacity will
by
billion
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c. How will banks induce investors to utilize this expanded lending capacity?
As the money supply increases interest rates will
and investors will want to borrow
funds
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Graw
Hill
< Prey
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