Suppose that the FRS undertakes a $10 billion open market pur- chase and that banks have a
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Suppose that the FRS undertakes a $10 billion open market pur- chase and that banks have a reserve requirement of 10 per- cent. What will happen to the money supply, credit supply, interest rates, aggregate de- mand, and RGNP? Can you tell exactly how much RGNP will change? Why or why not?
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