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Question
If the actual money multiplier equals the potential money multiplier and if the Federal Reserve wishes to increase the money supply by $500 when the reserve ratio is 10 percent, it should
A) sell $50 of government bonds.
B) buy $50 of government bonds.
C) sell $5000 of government bonds.
D) buy $5000 of government bonds.
Answer
This answer is hidden. It contains 1 characters.
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