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Assume that the required reserve ratio is 10%, that there are no cash leakages, and that banks hold zero excess reserves. Refer to Exhibit 13-1.
Assume that the required reserve ratio is 10%, that there are no cash leakages, and that banks hold zero excess reserves. Refer to Exhibit 13-1. Suppose that the Federal Reserve conducts open market operations by purchasing $1,000 worth of government securities from Bank A. As a result, Bank A finds itself with $1,000 in excess reserves that it lends out and those funds end up in Bank B. The loan made by Bank B ends up in Bank C, and the loan made by bank C ends up in Bank D. What dollar value goes in blanks (E) and (F), respectively?. Group of answer choices $729; $81 $81; $729 $10; $800 $700; $110
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