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If the Federal Reserve sells $20,000 worth of government bonds to banks, what will happen to the money supply? Assume that the reserve requirement is

If the Federal Reserve sells $20,000 worth of government bonds to banks, what will happen to the money supply? Assume that the reserve requirement is 20 percent and that the banks hold no excess reserves.

A. It will decrease by a maximum of $20,000.

B. It will increase by a maximum of $20,000. C. It will increase by a maximum of $100,000.

D. It will decrease by a maximum of $100,000.

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