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I having a difficult time with this portion please help Assume the reserve ratio is 10% Formula: Potential Expansion Deposits = 1/Reserve Ratio x Excess

I having a difficult time with this portion please help

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Assume the reserve ratio is 10% Formula: Potential Expansion Deposits = 1/Reserve Ratio x Excess Reserves County National Bank A L Reserves 20,000 100,000 Deposits ER = Potential Expansion 2. FED (Federal Reserve Bank). buys a $10,000 bond from bank. What is the potential impact on MS (Money Supply)? 3. FED. buys a $10,000 bond from bank customer. What is the impact on MS? Is there a difference between 2 and 3? Why? 4. Assume money supply rule. Growth in Q is 5%; growth in V is 2%. How much should the MS grow to keep P constant? Assume MV - P

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