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Solve please The Fed buys $5 million of securities from AIG, the desired reserve ratio is 0.05, and there is no currency drain. As soon
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The Fed buys $5 million of securities from AIG, the desired reserve ratio is 0.05, and there is no currency drain. As soon as the open market purchase is made, the bank's excess reserves are $ million. The maximum amount of loans that the banking system can create is , and the maximum amount of new money that it can create (not including the original deposit from AIG) is O A. $100 million: $95 million O B. $95 million; $100 million O C. $95 million; $95 million O D. $100 million; $100 millionStep by Step Solution
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