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Suppose in the Republic of Sasquatch that the regulation of banking rested with the Sasquatchian Congress, including the determination of the reserve ratio. The Central
Suppose in the Republic of Sasquatch that the regulation of banking rested with the Sasquatchian Congress, including the determination of the reserve ratio. The Central Bank of Sasquatch is charged with regulating the money supply by using open market operations. In September 2015, the money supply was estimated to be 60 million yetis. At the same time, bank reserves were 6.0 million yetis and the reserve requirement was 10 percent. The banking industry, being "loaned up," lobbied the Congress to cut the reserve ratio. The Congress yielded and cut the reserve requirement to 8 percent. The potential impact of this action could |:| the money supply by El million yetis. (Round your response to one decimal place.) Suppose the central bank decided that the money supply should not be increased. What countermeasure could it take to prevent the Congress from expanding the money supply? Raise the discount rate to prevent the expansion of the money supply. Lower the discount rate to prevent the expansion of the money supply. Increase regulations to prevent the expansion of the money supply. $5655.54 Buy government securities to prevent the expansion of the money supply
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