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- 2.2 What would happen to the money supply in each of the following cases, ceteris paribus? a The BON increases the required cash reserve

- 2.2 What would happen to the money supply in each of the following cases, ceteris paribus? a The BON increases the required cash reserve ratio from 5% to 7%. [1 mark] The Executive Committee of the BON raises the repo rate. [1 mark] C Suppose BON pursues an aggressive open market policy by selling government bonds. What will happen to the price of bonds and the interest rate? [2 marks]

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