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Assume the Central Bank buys $400K in US Treasury Bonds from corporations and the households. Also assume that the required ratio is .15 and the
Assume the Central Bank buys $400K in US Treasury Bonds from corporations and the households. Also assume that the required ratio is .15 and the currency drain/currency ratio (how much people like to hold in cash rather than in their banks) is .12, then how much did the money supply increase or decrease? (hint - keep no more than 3 decimal places in your money multiplier and select the answer that comes closest) 1,303,600 1,303,600 (C) 1,659,200 (D) 11,733,200
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