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Posted on Jul 04, 2024

If the required reserve ratio is 5%, when the central bank buys government bonds worth 20 mln from commercial banks the effect will be: A)

If the required reserve ratio is 5%, when the central bank buys government bonds worth 20 mln from commercial banks the effect will be:

A) a decrease of money supply by 200 mln

B) a decrease of money supply by 4 mln

C) a decrease of money supply by 100 mln

D) an increase of money supply by 100 mln

E) an increase of money supply by 400 mln

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