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Assume that the reserve requirement is 10 percent. Also assume that banks do not hold excess reserves and there is no cash held by the

Assume that the reserve requirement is 10 percent. Also assume that banks do not hold excess reserves and there is no cash held by the public. The Federal Reserve decides that it wants to expand the money supply by $50 million using open-market operations.

1.) In order to accomplish its goal, the Fed needs to buy or sell? $ millionworth of bonds.

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