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3. (20 points) Show the effect of an open market sale of 100 on the Central Bank balance sheet. 4. (30 points) Assume that banks

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3. (20 points) Show the effect of an open market sale of 100 on the Central Bank balance sheet. 4. (30 points) Assume that banks do not hold excess reserves and households do not hold cash. In this simple model, how much deposite Money) is created by an open market purchase of 100 from the nonbank public if the required reserve ratio is 10 percent

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