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Question 9 (1 point) Suppose the reserve ratio is 5 percent, banks do not hold excess reserves, people do not hold currency, and the Bank

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Question 9 (1 point) Suppose the reserve ratio is 5 percent, banks do not hold excess reserves, people do not hold currency, and the Bank of Canada purchases $20 million of government bonds. Which statement best describes the effects of Bank of Canada's purchase? a) Bank reserves decrease by $20 million, and the money supply eventually increases by $400 million. Ob) Bank reserves increase by $20 million, and the money supply eventually decreases by $400 million. O c) Bank reserves increase by $20 million, and the money supply eventually increases by $400 million. O d) Bank reserves decrease by $20 million, and the money supply eventually decreases by $400 million

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