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1. Suppose the reserve requirement is 15% and banks are holding no excess reserves, fill in the blanks below. Show your work for full credit.

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1. Suppose the reserve requirement is 15% and banks are holding no excess reserves, fill in the blanks below. Show your work for full credit. 2. Suppose deposits decrease by $10,000. By how much would the money supply change? (Hint: use the money multiplier to calculate) 3. What are the open market operations? How does an open market sale (OMS) affect the bank reserves (R) and the money supply (M1)? What happens to the federal funds rate (ffr)? Use the Market for Bank Reserves to graphically illustrate and explain your answer. 1. Suppose the reserve requirement is 15% and banks are holding no excess reserves, fill in the blanks below. Show your work for full credit. 2. Suppose deposits decrease by $10,000. By how much would the money supply change? (Hint: use the money multiplier to calculate) 3. What are the open market operations? How does an open market sale (OMS) affect the bank reserves (R) and the money supply (M1)? What happens to the federal funds rate (ffr)? Use the Market for Bank Reserves to graphically illustrate and explain your

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