Assume the Fed purchases $17,450 worth of U. S. Treasury bonds from Warren Buffett, who promptly deposits the money in the First National Bank. Assuming that the required reserve ratio is 4 percent and banks keep zero excess
reserves, the money supply in the economy will eventually:
O increase by a maximum of $16,752.
O increase by a maximum of $17,450.
O increase by a maximum of $436,250.
O increase by a maximum of $69,800.